BASE METALS & PREMIUM
Base metals are the building blocks of an economy, a harbinger of the health of the financial system. While clarity over GDP can prove illusive during uncertain times, base metals present a clearer picture. FIS has grown its presence in the base metals market offering comprehensive coverage to financial and physical clients trading futures, spreads and options on both LME and CME.
Our experienced team facilitates liquidity and execution and provides both technical and fundamental insight on market dynamics.
Premiums contracts are designed to help physical traders hedge the premium portion of the ‘all-in’ Aluminum delivery price, isolating the geographical freight and supply/demand dynamics. Despite the volatility in premiums for different geographical delivery points, it wasn’t until 2012 that the first premium contracts were listed to enable the market to hedge its exposure to physical deliveries. Copper is the latest market to benefit from a China-focused futures contract launched in 2017 to complement physical trading and enable enhanced risk management. Aluminium is the world’s most popular exchange-traded metal commodity at over 5 million tonnes per day, it accounts for nearly a third of all contracts concluded on LME, with over 100 brands traded.
Aluminium premium contracts first traded in September 2013 and the growth in volumes since that period has significant, with 3.58 million tonnes trading in the year to October 2017 versus 2.51 million tonnes in 2016. 2017 saw the start of trading of Copper Premium Grade A CIF Shanghai on CME – the first financially-settled exchange-traded product which enables hedging to the China copper premium.