Marex expands access to CME’s base metals futures as supply-demand tug of war continues

Rick Steves

Marex, one of the largest global metals brokers, has announced it will expand its clients’ access to CME Group’s base metals markets, starting first with CME Group’s global Aluminum futures contract.

CME Group Aluminum markets have seen an influx of new participation this year, having reached a single day volume record on October 5 of 7,929 contracts and an average daily volume of approximately 3,000 contracts in October month-to-date. Open interest reached a record of 1,411 contracts on October 19, 2022.

The third trimester also experienced much demand for the aluminum futures contract, with a record volume of over 2,300 contracts per day, surpassing the previous quarterly record by approximately 1,000 contracts. July and September were the top two trading months ever recorded at 2,659 and 2,642 contracts per day respectively.

The war pushed the price of aluminum to unprecedented levels. For example, the aluminum price on the LME (London Metals Exchange) with the three-month contract peaked at a record $4,000 a ton in early March 2022, compared to the $3,224 February monthly average of the same year.

In July, CME Group published a report about metals being caught in a supply-demand tug of war. Today’s announcement will help market participants to better manage their aluminum price risk.

An alternative way to manage Aluminum price risk

Jin Chang, Managing Director and Global Head of Metals at CME Group, said: “We continue to make tremendous progress in growing our physically-delivered Aluminum futures and offering market participants an alternative way to manage their Aluminum price risk. Our around the clock access, global footprint and industry-leading technology are strong competitive advantages and we are pleased that Marex will offer our Aluminum markets on its Neon Metals platform as part of its global expansion plans. We look forward to providing Marex customers with the transparency and reliability that comes with transacting with CME Group.”

Simon van den Born, President at Marex, commented: “Expanding into CME Group’s Aluminum markets responds directly to demand from our clients for access to alternative markets, but also aligns with our strategy to build a more global, technology-focused presence, which will better serve our client needs now and into the future. To complement the market access, we will also expand our research and markets coverage to include CME Group’s Aluminum and other base metals markets. This supports CME Group’s efforts to create a more robust marketplace that benefits the entire industry.”

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