Q2 2021 Metals Update

  • 13 Apr 2021
  • By CME Group

COMEX Aluminum futures gaining traction

  • Average daily volume (ADV) in Aluminum futures was 193 contracts (4,825 metric tons) in Q1, up 30% YoY.
  • Inventories continue to set new highs since globalizing the contract, with just over 33K metric tons in CME Group warehouses in April.

Learn more about ALI

READ: Five reasons interest in COMEX Aluminum is growing

Gold warrants as collateral

  • At present, CME Group accepts London gold bullion and gold warrants as collateral to meet Base and IRS performance bond requirements in the House origin, with over $3.9B worth of gold warrants currently pledged as collateral.
  • Effective April 28, 2021, CME Clearing (CME) will permit clearing members to deposit COMEX gold warrants (gold warrants) as collateral to meet Base and IRS performance bond requirements in the Customer Segregated and Customer OTC (“Customer”) origins.
  • For further information related to the gold warrant collateral program, please see the CME gold collateral website or contact CME Credit Risk at CreditRisk@cmegroup.com.

Learn more

Copper volume rises as manufacturing ramps up

  • COMEX Copper volume in February was the highest since June 2018 and the fourth highest monthly all- time volume.
  • Open interest in COMEX Copper during Q1 was also on a strong uptrend - up 2% on the same period in 2020.

Source: CME Group.

  • With a strong fundamental story, superior screen liquidity, and outperformance against peers, now is an opportune time to take another look at COMEX Copper.

Learn more about Copper

COMEX Copper options volumes surge in Q1

  • Copper options have seen a strong uptick in volume, liquidity, and customer involvement as copper has rallied to 10-year highs.
  • While the price of copper has risen to levels we have not seen in 10 years, the price of calls are still their long-term range. Calls have historically been priced between one and two implied vols above ATM. Call skew fell during the beginning of COVID-19 and has now returned to a normal range over the last year.
  • COMEX Copper options can offer simple and efficient execution directly via competitive live-market quotes on CME Globex, with affordable, transparent exchange fees and potential margin offset savings.

More on Copper options

Metal Options Update: Copper back in the limelight

Strong start to 2021 for Steel complex

  • Momentum in the Steel complex continues with average daily volume up 24% year to date vs. full-year 2020 to 24K tons. US Hot-Rolled Coil Steel futures are the primary driver of growth with the average daily volume over 20K tons, equivalent to $27 million/day in notional value.

Source: CME Group.

  • Busheling Steel Scrap continues to grow in volume and relevance. 2021 average daily volume is nearly 100 contracts.
  • European Hot-Rolled Coil Steel futures have also been a notable contributor with immediate uptake since the March 2020 launch. Average daily volume now stands at 1K tons.

Learn more on Steel

READ: The use cases for European Steel

READ: Review of 2020 steel market activity

Aluminum Auction registration now open

CME Group introduces the first electronic auction of aluminum. The Aluminum Auction supports established aluminum premium markets and provides market participants the ability to anonymously transact physical material in the spot market via their clearing member.

Why register for the Aluminum Auction?

  • Receive instant notifications when an auction is scheduled.
  • Monitor aluminum auctions in real time - don't miss out on market-moving information.​​
  • Exclusively available on CME Group's auction platform - don't miss out on trading opportunities.
  • Gain access to a proven auction platform for trading and price discovery in the physical aluminum market

Register now

COMEX to launch Lithium futures on May 3*

The Lithium Hydroxide (Fastmarkets) futures contract is financially settled based on the monthly arithmetic average of an assessment published by Fastmarkets each Thursday of the contract month.

The price assessment captures the spot price of battery-grade lithium hydroxide priced CIF China, Japan, and South Korea.

This product is quoted in US dollars per kilogram and has a contract size of 1,000 kilograms, equivalent to one metric ton.

Learn more about Lithium

Special Executive Report (SER)

* Pending CFTC regulatory review

Metals: The key to electronification of the auto industry

The role of copper in the push for a green future should not be underestimated. Not only is copper used within vehicle production but is also intrinsic in the various elements of electric vehicle infrastructure.

From copper to cobalt, this article looks at the different metals in electric vehicle production and how CME Group's suite of tools can help to hedge price exposure and plan for market fluctuations.

Read the article

Research: Copper in a post-COVID-19 world. Have we seen this before?

Despite the negative impact of COVID-19 on the auto sector, the industry’s demand for copper might be stronger than automotive sales data alone suggests.

Read the article

Data as of March 31, 2021, unless otherwise specified.

View the current version and an archive of the Metals Update online at: cmegroup.com/education/metals-update.html.