London Metal Exchange (LME), the world’s leading metal futures exchange, will see its dominance challenged by a CME Group bid to launch its own contract for aluminum.
Since the Soviet Union’s collapse, LME’s contract has been the benchmark for the $90 billion aluminum market, and the metal has accounted for about 40 percent of the exchange’s trading volumes.
Chicago-based CME Group, the world’s largest futures exchange, steps into the aluminum game after a wave of criticism against LME for long delivery queues at the exchange’s warehouses, which have led to a discrepancy between the physical aluminum market and the LME price.