In this report
- Reaching new highs by unlocking the potential of Aluminum futures
- More options, more choice, more precision: Tuesday and Thursday Metals Weekly options
- PGM Volume surges in 2023
- The steel market is forging ahead
- CME Group is the home of battery metals trading
- COMEX remains venue of choice for copper trading
- Use monthly or short-dated options to manage economic risk
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Reaching new highs by unlocking the potential of Aluminum futures
Traders have seen the potential of Aluminum futures for some time, but in 2023, the contract really started to take off.
Our physically delivered Aluminum futures can help traders manage their physical aluminum risk right across the supply chain.
2023 was capped off with records across the board with December trading over 9.5K contracts per day (or 240K metric tons), up 276% compared to 2022.
Participation has continued to grow throughout the year with over 600 unique participants now trading the contract, which is up 69% compared to 2022.
Finally, open interest surged in Q4 to an all-time high of 5.3K contracts on Nov. 3.
More options, more choice, more precision: Tuesday and Thursday Metals Weekly options
Tuesday and Thursday expiries have been added to Gold, Silver and Copper Weekly options.
Built on the success of Monday, Wednesday and Friday expiries, the addition of Tuesday and Thursday options offer more precision to trade around macro events while still providing the same transparency and versatility to your trading strategies.
PGM Volume surges in 2023
Platinum (PL) volume in 2023 was a record 24,713 contracts average daily volume (ADV), up 40% vs 2022.
Palladium (PA) volume was up 125% in 2023 to 3,673 ADV, while average open interest (OI) surged from 7,517 in 2022 to 15,821 on average in 2023.
The steel market is forging ahead
The adoption of Steel futures shows no signs of slowing down. 2023 was the seventh year of consecutive growth in the contract.
Over 1.6K contracts traded on average per day in 2023. It was capped off with a record trading day of 7.2K contracts in February 2023 as more and more participants see the benefits of hedging physical steel supply.
CME Group is the home of battery metals trading
CME Group has quickly become the home of battery metals. Cobalt traded over 100 contracts per day in 2023, with open interest surging to over 20K contracts. Lithium Hydroxide really took off in H2 2023. On average, 168 contracts traded per day in Q4 2023, with open interest building out to over 15K contracts.
Lithium Carbonate and Cobalt Hydroxide were added to our Battery Metals suite in late 2023 and we are excited to say that both contracts have traded for the first time in December 2023 and January 2024, respectively. Find out more about our suite of Battery Metals futures.
COMEX remains venue of choice for copper trading
COMEX copper offers best in class screen liquidity for both futures and options, and remains the venue of choice for investors and funds to gain exposure to the Copper market.
After a strong start to 2023 due to volatility as China reopened, demand didn’t materialize after the green energy transition target delayed and both volatility and the price of copper moderated throughout the year.
Heading into 2024, both financial and physical participants consensus seem to be pointing to another year of soft demand and lower prices.
With the backdrop of the energy transition still in play and supply concerns with the Panama drought, the stage is set for another interesting year in copper.
Use monthly or short-dated options to manage economic risk
Metals options reached new highs in 2023, with a record 79K contracts trading per day across the suite. This was mainly driven by the growth of Copper options and weekly options trading outside of U.S. hours as traders are using our monthly and short dated products to manage their price risk.
Highlights include:
- Introduction of Lithium and Cobalt options in Dec. 2023, both of which traded for the first time
- Copper options ADV up 36%
- Gold options ADV up 26%
- Silver options ADV up 35%
- Record year for weekly options complex
- Tuesday and Thursday expiries have been added to Gold, Silver and Copper
Gold: Will 2024 be a breakout year on rate cut hopes?
Gold’s performance has been modest, reaching $2,080 in July 2020, a level it struggled to maintain until it briefly broke out to a new high in Dec. 2023. What does 2024 look like for gold?
Battery Metals Prices are Falling. Will Demand Catch up to Supply?
Prices of cobalt and lithium have fallen by over 50% and nearly 75%, respectively, from their 2022 peaks.
Energy Transition Spiking Demand for Metals
EV market growth and wider decarbonization efforts are increasing demand for copper, aluminum, lithium and cobalt.
Gold Volatility Rises as Expectations Change
According to the CME Group Volatility Index (CVOL), the concern for an extreme move in gold reached its highest point in over a year in early October.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
