CFTC plans to overhaul aluminum pricing in US
XLB•XLB•XLB•XLB•The CFTC is examining US aluminum pricing and whether new contracts could improve transparency, local price discovery and hedging. The Midwest premium reached a record $1.19 per pound, or about $2,620 per metric ton, in June.
CFTC Chairman Michael Selig said he directed the agency’s global markets team to examine US aluminum pricing mechanisms and develop reform options. He said the current benchmark structure may incorporate costs that do not reflect US manufacturers’ supply chains.
The CFTC will also consider whether more US-based aluminum contracts could improve local price discovery and hedging options. Selig said a new contract would need participation from producers, consumers and other market participants to build liquidity.
US consumers typically pay the London Metal Exchange benchmark plus the Midwest premium, which covers costs such as freight, insurance and taxes. The premium hit a record $1.19 per pound in June, after US aluminum import tariffs were doubled to 50%; all-in prices exceeded $6,000 per ton as LME aluminum rose above $3,700.
