Cast aluminium alloy to debut in China's futures market

The China Securities Regulatory Commission has recently granted approval to the Shanghai Futures Exchange (SFE) for the registration of cast aluminium alloy futures and options, heralding the imminent debut of the first recycled metal in China's futures market.

Anticipating this milestone, the SFE is gearing up to undertake comprehensive preparations aimed at ensuring the smooth operation and fostering the healthy development of cast aluminium alloy futures and options within the market.

China stands as the world's largest producer and consumer of cast aluminium alloy, as highlighted by data from the China Nonferrous Metals Industry Association. In 2024, the country boasted a production capacity of about 13 million tons of cast aluminum alloy, with an actual output of around 6.2 million tons and an apparent consumption of about 6.73 million tons.

Renowned for its low density, high strength, excellent corrosion resistance, and superior casting processability, cast aluminium alloy finds extensive applications in diverse sectors such as automobiles, motorcycles, machinery, communication equipment, and electronic appliances.

Primarily crafted from recycled aluminum and other elements such as copper and silicon through the casting process, cast aluminium alloy stands out for its environmental benefits. According to CNMIA data, the carbon emissions associated with producing one ton of cast aluminium alloy amount to only about 3.6 percent of those from electrolytic aluminum (coal-fired), resulting in savings of 3.4 tons of standard coal and 22 tons of water.

Industry insiders emphasize the pivotal role of cast aluminium alloy in driving the nation's green transformation of economic and social development, owing to its significant energy-saving and emission-reducing attributes.

The introduction of futures and options for cast aluminium alloy is poised to accelerate this transformation by reshaping the market dynamics and standards pertaining to recycled aluminium.

Simultaneously, amid the rapid expansion of China's aluminum industry chain in recent years, enterprises are increasingly seeking effective price risk management solutions. The advent of futures and options for cast aluminium alloy is expected to cater to this growing need, offering a more comprehensive risk management service for enterprises operating across the aluminum industry chain.

Li Junfeng contributed to this story.