CME Group announces the first Aluminum Midwest Premium contracts traded

 CME Group, the world's leading and most diverse derivatives marketplace, today announced the first Aluminum MW U.S. Transaction Premium Platts (25MT) Futures (AUP) contracts were traded on Thursday 8 August. This trade was brokered by Jeffries Bache. Yesterday's trade was a 54 lot strip transaction for November andDecember 2013 between a physical trader and a major dealer.

"This innovative aluminum swap futures contract enables commercial market participants in North America to better manage their price risk on an average basis throughout the month," said Harriet Hunnable, CME Group Managing Director, Metals.

This contract is the first Exchange product that enables the aluminum Midwest premium to be managed. This is a complementary product to the LME aluminum contract. The US Midwest aluminum premium was originally created to cover the freight from Baltimore to the Midwest. It now incorporates supply and demand of the North American-specific market to complement the LME aluminum contract. In the past three years, the premium increased from $0.04/lb to close to $0.09/lb and it is now a larger component of the aluminum consumer's cost and risk. This contract enables market participants in North America to better manage their price risk.