London Metal Exchange to Launch New Low-Carbon Aluminum Contracts

SEATTLE (Scrap Monster): The London Metal Exchange (LME) announced its plans to launch new contracts for aluminium scrap and for low-carbon emissions aluminium. A standalone spot trading platform will be launched next year for the exchange of aluminium warrants. This will enable downstream users to procure metal with low carbon properties. According to LME spokesperson, the platform is expected to go live as soon as the end of 2021 or even before that.

The Exchange has been in constant engagements with various stakeholders in the aluminium sector on environmental sustainability issues. The efforts demonstrate the commitment of the Exchange in supporting initiatives that facilitate the global transition to a low-carbon economy.

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According to market sources, the aluminum traded on the new platform will have a price premium. The move towards a premium market is being supported by major aluminum producers including Rusal. Meantime, several traders pointed out that a major portion of aluminum from outside China is still low-carbon, produced with hydro power or other forms of renewable energy, and thus not a premium. Instead, the exchange should introduce discount for higher-carbon metal.