Aluminium Alloy markets
Market information
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LME (London Metal Exchange)
The London Metal Exchange (LME) is the world’s premier non-ferrous metals market, with highly liquid contracts. It is an innovative Exchange, whilst maintaining its traditional strengths in a modern business environment. It remains close to its core users by ensuring its contracts continue to meet the high expectations of a demanding industry. As a result, it is highly successful, with a turnover value of some US$2,000 billion per annum. It is a major contributor to the UK’s invisible earnings, responsible for more than £250 million in overseas earnings each year.
Aluminium Alloy Ring Trading Times
First Session
1st Ring
11:45 - 11:50
2nd Ring (Official)
12:35 - 12:40
Kerb Trading*
13:15 - 15:10
Second Session
1st Ring
15:10 - 15:15
2nd Ring (Offical)
16:30 - 16:35
Kerb Trading*
16:35 - 16:45
*Approximate start time for kerb following declaration of the official prices at end of each metal's morning ring 2
LME Aluminium Alloy Contract Specifications
LME Aluminium Alloy Futures & Traded Options
Some 7 million tonnes of recycled aluminium is currently produced annually throughout the world. Much of this is produced as varying grades of aluminium alloy for specialist use, particularly for diecasting products for the automotive industry.

New techniques enabling secondary metal to be used in place of primary, the greater pressure for recycled products to protect natural resources and the ever growing demand from the automotive industry will almost certainly see secondary production increase in the future.

In 1991 following extensive consultation with the industry, the LME introduced futures and traded options contracts for aluminium alloy and traded average price options (TAPOs) were added in October 2000. These contracts were specifically designed to provide a more appropriate hedging medium and a more realistic reference price basis for the secondary aluminium industry than was previously offered through the primary aluminium contract.
LME Aluminium Alloy Futures Contract Specification
Contract

Aluminium Alloy conforming to one of the specifications below:
A380.1, 226 or D12S

Lot size
20 tonnes (with a tolerance of +/- 2%)
Form
Ingot
Weight
4 -14 kg each.  Each parcel placed on warrant shall not exceed 1000kg each
Ingots shall not exceed 800mm length
Delivery dates
Daily from cash to 3 months (first prompt date two working days from cash). Then every Wednesday from 3 months to 6 months.  Then every third Wednesday from 7 months out to 27 months forward.
Quotation
US dollars per tonne
Minimum Price Movement
50 US cents per tonne
Clearable currencies
US dollar; Japanese yen; sterling; euro
LME Aluminium Alloy Options Contract Specification
Delivery dates
Monthly from the first month out to 27 months
Value date
The third Wednesday of the prompt month
Exercise date
The first Wednesday of the prompt month
Premium quotation
US dollars per tonne
*Strike price

$25 gradations for strikes from US$25 to US$3975
$50 gradations for strikes form US$4000 to US$7950
$100 gradations for all strikes over  $US8000
*Strike price gradations and tick size for premiums available in all clearable currencies
LME Aluminium Alloy Traded Average Price Options Contract Specification
Contract date
The business day on which the contract is traded
Contract period
Calendar months up to 15, 27 or 63 months forward (in line with the underlying futures contracts).  The inclusive period between the first business day and the last business day of the traded month.
Option type
Calls & puts based on the monthly average settlement price (MASP)
Currency & strike price
US dollars :$1 gradations
Premium tick size
0.01 USD (one cent)
Premium payment
Next business day after contract is traded
Settlement date
Settlement is two business days after exercise.
The futures trades settle as per LME rules & regulations.
Contact the LME
The London Metal Exchange Limited
56 Leadenhall Street
London EC3A 2DX
UK

t: +44 (0)20 7264 5555
f: +44 (0)20 7680 0505
e: click here
w: lme.co.uk