According to a recent report, the London Metal Exchange will add to its aluminium pricing offering a new cash-settled European duty-paid aluminium premium contract settled against Fastmarkets’ benchmark Rotterdam premium. The news came after Alex Shaw, head of product development and research at the LME, announced it officially at the Fastmarkets International Aluminium Conference on Tuesday, September 22. The new contract is schedule to launch in 2021.
“We’ve looked to extend [our product offering] with a duty-paid European product, which we are pleased to be launching with Fastmarkets to provide both duty-unpaid and -paid for the European market,” said Shaw.
Shaw pointed out that previously LME launched an alumina price in 2019 to provide hedging tools, followed by US and European premium products, which can interact with the LME (aluminium) contract to provide effective all-in prices for those different markets.
Besides launching a new contract, LME is aiming at a number of other additions to the aluminium suite, while simultaneously focusing on sustainability and transparency.
“We’re looking to target to launch a recycled aluminium contract focusing on used beverage cans to provide those tools for the secondary aluminium market and provide a product which is very low carbon in its nature of being a recycled aluminium product,” Shaw said at the virtual conference.
In mid-August, the London Metal Exchange released a package of sustainability proposals, including new aluminium and steel scrap contracts, a spot trading platform and LMEpassport - a new digital register for physical metals data.
The proposals were set out in a discussion paper to the market seeking feedback by September 24, 2020.
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