First trades of CRU-settled LME Alumina contract

The London Metal Exchange’s Alumina contract has commenced trading. This is settled on a basket of CRU’s alumina price, the CRU-API, and Fastmarkets’ FOB Australia alumina index. Multiple lots of 50 t were traded on Thursday 17 October 2019: at $284/ t for November 2019 and $294 /t on the January 2020 contract.

CRU’s Alumina Price Index (API, Australia FOB) on the same day edged lower to $277.5 /t, with liquidity recently provided by alumina spot cargos sold to China. The latest physical market transactions involved two 30,000 tonnes Australian cargos sold at $302.00/t and $303/t China CIF respectively. IMO 2020 has resulted in the ocean freight cost between Western Australia and China increasing to $25.00/t for December 2019. This is up nearly $2.00/t compared to November deliveries.

As the physical market’s leading, transaction-only price benchmark, the CRU-API is used widely in the settlement of physical contracts and accurately reflects true market fundamentals, incorporating verified physical trades from across the supply chain. As such, its use in the settlement of the LME Alumina futures contract is another natural application for the CRU-API. The now active LME alumina contract provides an ideal price risk management tool for physical market participants.

About CRU

CRU is an independent, privately owned, price, analysis, consulting and events business specializing in the mining, metals and fertilizer sectors.  Founded in the late 1960s and headquartered in London, it has over 280 employees worldwide and has analysts and price assessors in London, Pittsburgh, Santiago, Delhi, Mumbai, Shanghai, Beijing and Sydney.

The company delivers independent market analysis and price assessment across a comprehensive range of global commodities – its reputation with customers across mining, metals and fertilizers is for integrity, reliability, independence and authority.

The CRU-API (Australia FOB alumina) is a transaction-only weekly price benchmark. Use of transaction data alone as data inputs to this price ensures that it accurately reflects the actual spot market with no risk of information from sentiment, errant opinion, speculative or even confirmed but ultimately unexecuted bids and offers entering the published price. Click here to view more detail on applicable methodology and definitions.

The CRU-API and other leading CRU Alumina and Bauxite prices and market analysis are available in the CRU Bauxite & Alumina Monitor.