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Flack Global Metals becomes member firm of CME Group

November 17, 2021 - Flack Global Metals, Chicago, announced that it is now a Member Firm of the CME Group, enabling the company to enhance market making activities using the CME Hot Rolled Coil contract. FGM is a domestic flat-rolled metals distributor and supply chain manager, an international commodities trader, and global hedge fund – purpose built to deliver certainty. By becoming a CME Group Member Firm, the risk management team at FGM will now be able to provide even greater liquidity to buyers of flat rolled metal products who look to the firm for supply chain management as well as hedging services.

"When we founded FGM over a decade ago, we embedded the HRC forward curve into every aspect of our company," said Jeremy Flack, founder and chief executive officer. "It was our belief then – and is even more so today – that hedging is the best way to provide certainty in securing metals supply and pricing. We have always relied on the products of the CME so it seems only fitting that we now become a member firm."

As the world's most diverse derivatives marketplace, CME Group enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.

The recent price rally in steel and other metals has raised the interest in and acceptance of hedging as a means for OEMs to control their material costs. As an early and vocal proponent of hedging in the steel industry, FGM has seen its hedging volume increase by 1300% in the last four years. In joining the CME, Flack believes his company will continue to lead an industry that is evolving away from index-based pricing to other mechanisms.

"The COVID-fueled price increases over the last 18 months have made OEMs more receptive to alternatives to index or spot buys," said Flack. "It is hard to argue with the numbers. Our customers who actively hedged this rally are expected to save over $600 a ton this year. That will equate to over $50 million we will have saved our customers by using the CME HRC contract. By being CME floor members, we will continue to add to the liquidity of this product to aid all steel buyers who choose to hedge."

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