Five things you should know about Aluminum futures

In July 2019, CME Group expanded its warehousing network to include delivery points in North America, EMEA and APAC.  As of January2025, warehouses are in 13 different locations, with a total of 37 approved warehouses.  

While the contract is duty-unpaid, duty-paid metal may also be delivered against the contract.

Current warehouse locations (as of January2025):

• U.S. – Owensboro, KY; New Orleans, LA; Toledo, OH; Highland Park, MI; Portage, IN
• EMEA – Rotterdam, the Netherlands; Bilboa, Spain; Antwerp, Belgium
• APAC – Johor, Malaysia; Port Klang, Malaysia; Singapore; Gwangyang, Republic of Korea; Busan, Republic of Korea

Aluminum futures are quoted in USD per metric ton ($/MT).

The legacy Copper futures contract, by contrast, is quoted in USD per pound ($/LB). Additionally, Copper futures is a duty-paid contract with warehouse locations only in North America.

As Aluminum specifications widely match industry standards, pricing in the market will also closely correlate with other international reference prices. However, the correlation is not perfect, opening arbitrage opportunities and relative value trades between instruments listed on different exchanges and delivered in different locations. Other commodity markets have greatly benefited from having liquid futures contracts listed at various exchanges.

• Aluminum futures operate on a monthly futures structure, with contracts settling on the third last business day of the month, similar to Copper futures.
• Futures contract size for aluminum is 25 metric tons.
• Load out requirements (2% of total inventory with a minimum of 1,000MT by primary conveyance) are by individual warehouses.
• Preference for load out is given to cancelled warrants (futures first) – ensuring warehouse load out obligation is being met with metal from exchange related activity.
• Warehouses are required to report daily inventory of all metal in store; a daily stock report is published by the Exchange by location and indicates the level of both eligible and registered inventory and the movement into and out of each location.
• All warehouses approved for delivery of aluminum must have designated indoor, outdoor, or both indoor and outdoor storage space.

CME Group does not generate any revenue from Exchange approved warehouses.

Trading in Aluminum futures is available on-screen through Globex or through the brokered block market and cleared via ClearPort, giving participants multiple venues at which to execute trades.

The continuously improving liquidity and on-screen transparency is reflected through increased average daily volume (ADV) and open interest (OI), which have reached record high levels in 2023 and 2024. Monthly ADV set an all-time high of over 9,500 contracts in December 2023, followed closely by over 9,300 contracts per day in January 2024. All of the top 10 volume days have occurred since December 2023, with more than 10K Aluminum futures contracts traded on 59 different trading days, including a record 34,832 contracts traded on trade date July 18, 2024. 

Aluminum OI reached a record 5,478 contracts on July 9, 2024, an increase of nearly 49%, YoY.

The aluminum active month, or lead month, is the anchor month for settlements and will be the third chronological month. However, on the fifteenth of the current calendar month, the active month becomes the fourth chronological month and remains the fourth chronological month until expiry of the current calendar month.

Position limits in Aluminum futures are categorized as spot month position limits and position accountability levels. 

Spot month position limits in Aluminum futures are levels which a market participant may not exceed unless they have an approved exemption. Any positions in excess of these limits would be considered a rule violation pursuant to Rule 562.

Position accountability levels are levels which a market participant may exceed and not be in violation of an Exchange Rule. A market participant who exceeds an accountability level may be asked by the Market Regulation Department to provide information relating to the position, including, but not limited to, the nature and size of the position, the trading strategy employed with respect to the position and hedging information (if applicable). A market participant in excess of accountability levels may be ordered to not further increase positions, comply with a limit set by the Market Regulation department or reduce any position in excess of the accountability rule.

For further information, see the Position Limit Market Regulation Advisory Notice.

Misunderstood information can deter entry into a market, however, gaining knowledge of this information allows for confident participation. Increasing volume, growing open interest, multiple venues for execution with deep, transparent markets and a global warehousing network with rules in place to limit the possibility of queues makes Aluminum futures a viable, tradable futures contract.