On May 23, 2025, the China Securities Regulatory Commission issued an announcement approving the listing registration of cast aluminum alloy futures and options on the Shanghai Futures Exchange.

Trading of cast aluminum alloy futures, China’s first recycled metal futures variety, commenced at 9:00 on June 10, 2025, while cast aluminum alloy options began trading at 21:00 on the same day. Lizhong Group completed the first transaction following the listing of the cast aluminum alloy futures contract AD2511.

Highlights

At the listing ceremony of cast aluminum alloy futures and options held by the Shanghai Futures Exchange on June 10, leaders from the Futures Department of the CSRC, Shanghai Municipal Government authorities and China Nonferrous Metals Industry Association attended and delivered speeches. As an outstanding enterprise in the cast aluminum alloy sector, Lizhong Group was invited to attend the ceremony and address the audience.

Mr. Zang Ligen, Founder of Lizhong Group, stated that the launch of cast aluminum alloy futures will address volatile product prices across the industry and provide diversified risk management instruments. It enables enterprises to lock prices accurately, control operational risks, and strengthen overall risk resilience and market competitiveness. Lizhong Group will actively participate in the non-ferrous metals derivatives market, flexibly apply diversified on-exchange and off-exchange tools for risk control, and comprehensively upgrade its risk management system.

Significance and Impacts of Futures Listing

Cast aluminum alloy, primarily produced from scrap aluminum, is a core product for low-carbon transformation of the global aluminum industry and the main form of recycled aluminum in China. It is widely used in automobiles, motorcycles, mechanical equipment, communication devices, home appliances, hardware and lighting fixtures.

China is the world’s largest producer and consumer of cast aluminum alloy. In 2024, China’s recycled cast aluminum alloy capacity reached approximately 13 million tons, output stood at around 6.2 million tons, and apparent consumption totaled about 6.73 million tons.

Due to price discrepancies between scrap aluminum and electrolytic aluminum prices, the industry has long lacked an open, unified and efficient pricing mechanism. Traditional hedging relying on electrolytic aluminum futures cannot effectively safeguard recycled aluminum enterprises.

As China’s first financial derivative for recycled metals, cast aluminum alloy futures and options fill a market gap in domestic recycled metal derivatives. It marks a pivotal step for China’s futures market to support carbon peaking, carbon neutrality goals and circular economy development, helping standardize scrap aluminum recycling systems and build a green low-carbon circular economic system.

The price discovery function of cast aluminum alloy futures delivers transparent, authoritative market pricing references for Lizhong Group to guide spot transactions. Meanwhile, it provides scientific and precise risk management tools, optimizing the Group’s previous hedging strategies that relied on electrolytic aluminum futures. It eliminates interference from price spreads between primary and recycled aluminum, greatly improving hedging efficiency.

By qualifying as a registered delivery brand, Lizhong Group expands sales channels through futures delivery, further boosting output, sales volume and corporate profitability.