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Aluminium is the most heavily produced and consumed non-ferrous metal in the world. Its low density and malleability has been recognised and championed by the industrial world.
Aluminium has many diverse application, ranging form beverage cans to cars. In 2001, world primary refined production alone totalled over 24 million tonnes. The total turnover for LME primary aluminium futures and options in 2001 was over 25 million lots (625 million tonnes).
The underlying assumption of physical delivery is acknowledged as a major factor in the credibility of the official price set on the LME. Consequently trading of LME aluminium has increased steadily since the contract’s introduction in 1987 so that the LME has the most liquid aluminium contracts in the world.
LME Aluminium Futures Contract Specification
| Contract |
Aluminium of 99.7% purity (minimum) |
| Lot size |
25 tonnes (with a tolerance of +/- 2%) |
| Form |
1. Ingots
2. T – bars
3. Sows |
| Weight |
1. 12 – 26 kg each. Parcels of ingots on warrant shall not exceed 2 tonnes each
2. Shall not exceed 5% more than 750 kg
3. Shall not exceed 5% more than 750 kg |
| 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 63 months |
| Quotation |
US dollars per tonne |
| Clearable currencies |
US dollar; Japanese yen; sterling; euro |
| Minimum Price Movement |
Ring - Outright $0.50, Carries $0.01
LME Select - Outright $0.25, Carries $0.01
Inter-office - Outright/Carries $0.01
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LME Aluminium Options Contract Specification
| Delivery dates |
Monthly from the first month out to 63 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 TAPOS 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 base don the monthly average settlement price (MASP) |
| Currency & strike price |
US dollars :$1 gradations
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| Premium tick size |
0.01 USD (one cent)
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| Premium payment |
Next business day after contract is traded
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| Settlement date |
Settlement is two business days after exercise
The futures trades settle as per LME rules & regulations. |
Access the special contract rules for metals using the LME online rulebook.
The LME futures and traded options contracts have been designed in conjunction with industry professionals across the world, to provide the optimum combination of physical contract and risk management mechanism.
As a physical contract, LME high grade primary aluminium is well suited for industrial consumers and producers. It offers a network of international delivery points, a choice of delivery shapes and tight tolerances.
As a risk management mechanism, the LME high grade aluminium contract offers transparency with the security of clearing, stability through regulation, and a 24 hour global trading structure that are the hallmarks of the world’s leading non-ferrous metal exchange.
The LME has long acknowledged the global nature of industry and has developed an international network of warehouses in Europe, Asia and the US for the delivery and take-up of the metal. In addition it has approved brands from around the world which include all the major aluminium producing companies.
LME contracts may only be offered or sold to United States foreign futures and options customers by firms registered with the commodity Futures Trading Commission (CFTC), or firms who are permitted to solicit and accept money from foreign futures and options customers from trading on the LME pursuant to CFTC Rule 30.10
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