Q1 2022 Metals Update

  • 25 Jan 2022
  • By CME Group

COMEX launches two new Portside Iron ore contracts

  • The products are listed on COMEX and are a strong addition to CME Group’s market leading suite of metals derivatives, offering our customers a key differentiated product linked to an increasingly important part of the iron ore transactional chain.  
  • CME Group is the first global exchange to list futures linked to China Portside Iron Ore prices and are based on assessments from Argus. 
  • On the first week of trading, 700 lots or 700,000 MT of PAC (CNH denominated contract) traded across multiple counterparties and two IDBs.

 Learn more about Portside Iron Ore

 READ: Portside Iron Ore - The future(s) king

Fifth successive year of growth for Steel complex

  • Fifth consecutive record volume year for U.S. Hot-Rolled-Coil (HRC) Steel futures with nearly 1K contracts or 20,000 tons (~$30 million notional) trading daily in 2021. 
  • Open Interest also reached all-time highs in HRC with a December ’21 average of 40K+ contracts or 800K metric tons (over $1.14 billion notional).
  • European HRC Steel futures hit record volume, open interest, and participation in 2021. Averaged 1.1K metric tons traded per day in 2021, with open interest over 36K metric tons and the largest participant growth since launch.
  • CME Group Steel futures can be a cost-effective hedging tool to complement a strategy and help minimize risk along the steel supply chain.

 Learn more about steel

Shanghai Gold futures (SGE) records rebound in 2021

  • Shanghai Gold futures continues to grow in 2021, with ADV up 32% YoY and average open interest up 63% YoY. Key 2021 milestones:
  • Inter-commodity spread (3SGU vs 1GC) was launched in mid December and it has been traded regularly. 
  • First block trade was submitted in December. Block liquidity will be one of our priorities in 2022 to grow the products further. 
  • Increased position limits in October from 400 to 1,500 lots. 
  • The addition of new market makers helping to bolster screen liquidity. 

Aluminum suite going from strength to strength

  • COMEX Aluminum (ALI) ADV grew 236% YoY to 576 contracts while ADV during Q4 rose 485% YoY to 688 contracts.
  • ADV in CME Group’s suite of Aluminum Premium contracts reached 692 contracts, the second strongest annual ADV all-time behind 2020 ADV of 788 contracts.
  • Participation was a record high in 2021. The number of unique participants trading COMEX ALI grew 151% YoY.
  • Futures and options volumes have shown impressive growth, with Q3 +42% YoY. Margin offsets are available vs other CME Group Benchmark products, most notably copper at 30%.

Copper options set new ADV record in 2021

  • Copper options set a new ADV record at nearly 3,000 RT in 2021 with record average OI at nearly 60,000 contracts. 
  • Liquidity improves consistently and block and RFQ venues have matured dramatically in the last year. 
  • The marketplace is now expressing views through options more frequently, and options has been on the rise.

 Find out more about Copper options

Aluminum Auction

CME Group launched the electronic Aluminum Auction platform in October 2021. With many participants registered, we look forward hosting more auctions in 2022.

The Aluminum Auction was launched to support established aluminum markets and provide a platform for market participants to transact physical material anonymously in the spot market.

To be the first to know when an auction has been scheduled, you need to register. Register here today.​​​​​​

 Learn more on Aluminum Auction

A record breaking start to 2022 for Silver weekly options

Silver weekly options set a new record on January 6 of 3,200 contracts traded. The previous record was 2,600 contracts set on February 25, 2020.

Weekly Gold options set a record at over 8K ADV in 2021 despite challenging macro conditions for precious metals.

Non-U.S. volumes in Metals options remain strong at over 21% of total volumes, the second highest percentage all-time. Liquidity in the overnight sessions is as strong as it has ever been providing global traders ability to transact during their business hours.

CME Group cements its position as the home of battery metals

Since launching in late December 2020, Cobalt futures have quickly gained traction with 3,400 MT traded.

After launching Lithium Hydroxide futures in May 2021, CME Group had the first ever futures trades of Lithium on an exchange.

 Learn more about Cobalt

 Learn more about Lithium​​​

EBS Direct: Relationship trading for spot OTC precious metals

Aggregated price streams: connect via single EBS API or GUI to multiple bank and non-bank LP streams.

Disclosed and/ or undisclosed liquidity: ​​​​LPs pricing in their own names or via a prime bank. Accessing via the pre-screened credit of an EBS Prime Bank removes the requirement for Designation Notices and post-trade give up.

Use EBS Quant Analytics TCA to monitor cost of execution, post-trade markouts, LP hold times, and liquidity alpha–all available on one portal.

 Learn more about EBS Direct for precious metals​​​

Platinum and the Hydrogen Economy

Due to its unique chemical and physical properties, platinum is at the forefront of proton exchange membrane (PEM) applications – transformative technology that holds the key to unlocking the zero-emissions potential of hydrogen.

PEM technology is used in both electrolyzers to produce hydrogen and in hydrogen fuel cells which can power, for example, an emissions-free fuel cell electric vehicle (FCEV).

 Read the article

Never miss a trade with new block alerts

Get real-time block alerts sent to your inbox or mobile device – you’ll be notified anytime a trade occurs for the product group you selected. Filter to “My Blocks” for a new, personalized view of the products you want to follow.

 Read more

Data as of September 30, 2021, unless otherwise specified

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