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CME futures plan drawing interest: Brock

Apr 02, 2014 | 11:45 AM | Michael Cowden

Tags  aluminum, CME Group, aluminum futures, Aluminum Association, Heidi Brock, LME, London Metal Exchange, Michael Cowden

SAN ANTONIO — Aluminum Association members are closely following CME Group Inc.’s plans to launch a North American aluminum futures contract, according to association president Heidi Brock.

"I’ve certainly been hearing the buzz and the interest in learning more about it," Brock said during a press conference April 2 at the association’s spring meeting in San Antonio.

The interest from members of the Arlington, Va.-based trade group, which include aluminum producers and fabricators, comes after a U.K. High Court ruling quashed attempts by the London Metal Exchange to reform warehouse policies in order to trim bloated inventories at some exchange-listed sheds (, March 27).

Chicago-based CME Group plans to launch a competing North American physically delivered aluminum futures contract by May 5 (, March 18).

Brock declined to comment specifically on the U.K. ruling, which she characterized as ongoing litigation while citing the association’s antitrust policies.

"What we do support here at the association is a fair system where all commodities can effectively compete and just recognition that the industry is currently operating in a challenging economic environment, so I think more products offer more options for our members," she said.

Some market sources have told AMM they want an alternative to the LME, especially given log-jammed warehouses and their potential impact on regional free-market premiums, including the Midwest premium. But others have questioned whether a CME contract would have enough liquidity or name recognition to gain traction, especially among downstream consumers long accustomed to pricing systems based on the LME.

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