Aluminium premiums

Aluminium Premium contracts are standard futures that are cash settled against monthly averages published by either Platts or Fast Markets. The premium contracts represent different geographical freight and supply/demand constraints in each region. 

Roughly speaking the premiums on all contracts represent approximately 20-25% of the underlying value of aluminium, so the contracts were introduced to enable traders to hedge their basis risk on trading Aluminium in different geographic regions. 

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