Will the introduction of this tool increase trading volume and liquidity on CME’s aluminum contracts?

Short answer: Yes – the screen‑based price assessment tool is expected to boost both trading volume and liquidity in CME’s aluminum contracts, especially the Aluminum Midwest Premium (AMP) futures.

Why:

The new Platts‑CME screen‑based assessment provides a transparent, high‑frequency reference price that sits directly in the trading screen. By delivering an “on‑screen” benchmark that is tightly coupled to the cash market, the tool reduces the information gap between physical traders and derivatives participants. That tighter price‑discovery loop encourages more market makers to post quotes, narrows bid‑ask spreads, and draws additional hedgers (e.g., primary aluminum producers, fabricators, and recyclers) who now have a reliable real‑time cash anchor for their futures positions. The sentiment of the announcement (+60) and the involvement of a reputable price‑setter (Platts) further reinforce market confidence, a classic catalyst for higher open interest and daily turnover.

Trading implications:

- Liquidity watch: Expect a measurable reduction in spread width on AMP contracts within the first few weeks; monitor the Level 2 order book for a rise in depth.

- Volume spikes: Look for a surge in volume on the nearest‑month contract as participants test the new benchmark; a breakout above the prior‑day high on increased volume can be a short‑term bullish signal.

- Basis strategies: The more accurate cash‑futures basis that the tool enables creates opportunities for basis‑trade arbitrage—long the future, short the physical (or vice‑versa) when the basis diverges beyond historical 1‑σ levels.

- Risk note: Early adoption may bring short‑term volatility as traders adjust to the new reference; keep stop‑losses tight until the market settles into the new pricing regime.

Overall, the screen‑based assessment should make the AMP market more efficient, attract a broader participant base, and translate into higher volumes and tighter liquidity on the CME aluminum contract ladder.