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With a modified A380.1 specification, this new aluminium alloy contract, has been developed following intensive discussions with all segments of the North American secondary aluminium industry. It has a specification that reflects the production and consumption of aluminium alloy in the US and is restricted to delivery points within the region.
The use of aluminium alloy, particularly for the production of automotive components including lightweight engine parts, has been steadily growing internationally over recent years. There is every indication that this growth will continue in the foreseeable future. For this reason the LME introduced an aluminium alloy contract in 1992 for futures and traded options. Traded average price options contracts (TAPOs) were added in October 2000. However, the main consumers, auto manufacturers, use different grades of alloy in different regions of the world. While the LME contract was being traded for customers in Europe and the Far East it was evident that it was not gaining acceptance in North America.
Always ready to listen to industry and to amend contract specifications if necessary, the LME entered talks with consumers, secondary smelters, scrap dealers, traders and merchants in the US to develop a special contract to meet their needs. The contract, North American Special Aluminium Alloy (NASAAC) was approved in November 2001 and given a launch date of 4 March 2002 with a first prompt date of 5 June 2002. The first prompt month for traded options and TAPO contracts was set at July 2002.
LME NASAAC Futures Contract Specification
| Contract |
Aluminium alloy conforming to the 'LME NA380.1' specification (an LME modification of The Aluminium Association Inc. A380.1 specification (1989)) |
| Lot Size |
20 tonnes (with a tolerance of +/- 2%) |
| Form |
1. Ingots
2. Small sows (four-way entry sows)
3. Large sows (low profile sows)
4. T-bars |
| Weight |
1. 9 38 lbs (4 17.3 kgs) pieceweight. 500 - 1000kgs (1,100 -2,200lbs) bundleweight
2. 900 1,300 lbs (408 590 kgs) pieceweight.
3. 1,100 1600 lbs (500 726 kgs) pieceweight
4. 900 - 1,600 lbs (408 - 726 kgs) pieceweight |
| 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 |
Ring - Outright $0.50, Carries $0.01
LME Select - Outright $0.25, Carries $0.01
Inter-office - Outright/Carries $0.01 |
| Clearable currencies |
US dollar; Japanese yen; sterling; euro |
LME NASAAC Traded 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 |
LME NASAAC 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
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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.
LME NA 380.1 Specification
The aluminium alloy delivered under this contract must conform to the LME NA380.1 specification (an LME modification of The Aluminium Association Inc A380.1 specification (1989)), produced in conformity with the specification below.
| Element |
Minimum |
Maximum |
| Copper |
3.00 |
3.50 |
| Silicon |
8.50 |
9.50 |
| Iron |
0.80 |
1.00 |
| Magnesium |
- |
0.10 |
| Zinc |
- |
3.00 |
| Manganese |
- |
0.45 |
| Nickel |
- |
0.50 |
| Tin |
|
0.10 |
| Lead |
- |
0.10 |
| Chrome (chromium) |
- |
0.10 |
| Titanium |
- |
0.10 |
| Others each |
- |
0.10 |
| Others total |
- |
0.50 |
| Sludge = Fe + 2Mn + 3Cr |
- |
1.80 |
Production must be filtered.
Must be brand listed in the LME-approved list of North American Special Aluminium Alloy brands.
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