From Minyanville:
The London Metal Exchange (LME) announced a new feature, giving traders more options than ever. Specifically, the exchange will give traders the ability to hedge aluminum prices, as the commodity continues to rise due to lengthy delivery times that have thrown a wrench in a number of supply chains.*See, for example "LME halts plan to cut metals queues after court ruling - FT.com" or "Troubled Russian Aluminum Giant Stops LME Warehousing Rule Changes"
The new contract will be physically settled and will cover aluminum in North America, Western Europe, and Asia. A specific launch date for the contract has yet to be set, but it appears that a North American contract will begin trading sometime in May.
"The LME remains committed to addressing the underlying causes of queues, and does not believe that a premium hedging contract is a substitute for such action. However, given the likely timescale for queues to diminish at LME warehouses (including the potential delays arising from legal proceedings), a premium hedging contract may be of assistance to the market," said Matthew Chamberlain of the LME....MORE
