NEW YORK United Co. Rusal (UC Rusal) and Reynolds Consumer Products Inc. have voiced their support for CME Group Inc.s North American aluminum futures contract, which saw 56 contracts traded on its opening day May 6.
CME said that the contracts were traded in four different expiry months by Macquarie Bank Ltd.
The active trading in the new aluminum contract stands in contrast to other metal contracts introduced recently by the Chicago-based exchange, a CME executive told AMM (amm.com, May 6).
UC Rusal, Lake Forest, Ill.-based Reynolds and MillerCoors LLC, Chicago, have expressed their support for the CME contract, which is aimed at providing aluminum market participants with a tool for managing exposure to "volatile North American prices" while allowing access to physical aluminum at several CME-approved warehouses in Baltimore, New Orleans and Ypsilanti, Mich.
"We see CME Groups new aluminum contract as an important pricing option for those of our North American customers who are looking to hedge the all-in price," Rusal director of sales and marketing Steve Hodgson said in a statement.
"We firmly believe the contract can become the new benchmark for the North American aluminum industry," MillerCoors global risk manager Tim Weiner said in a statement. "Were enthusiastic about this contract and stand ready to support it by hedging our aluminum exposure."
Weiner said last year that the London Metal Exchange warehouse systems lengthy queues and high premiums paid for metal have "imposed an additional $3 billion expense on companies that purchase aluminum" (amm.com, July 23).
Reynolds chief executive officer Lance Mitchell said May 7 he hopes the contract will improve transparency and price discovery in the U.S. market while also allowing the company to better manage its aluminum price risk.