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New LME Al premium hedging contract might help cut queues

April 07, 2014 - 17:24 GMT Location: London

KEYWORDS: lme , aluminium premiums , premium hedging

The London Metal Exchange will launch aluminium premium hedging contracts in Europe, Asia and North America, it said in a notice on Monday April 7.

"Following positive feedback from key market participants, the LME is today announcing its intention to launch a new suite of products which will allow buyers to take physical delivery of readily-accessible metal warrants in specific regions of the world," the notice said. "The contract will initially be deployed for aluminium in three regions (North America, Western Europe and Asia), with the potential for other metals if market demand proves sufficient," it added. Presently, only the aluminium price itself can be hedged. As premiums for accessing metal in each region have grown – peaking this year in North America at about 25% of the overall cost...

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