Global Markets Advisory Committee

Opening Remarks
Global Markets Advisory Committee

Panel 1: The State of the Metals Markets

Derek Sammann, The CME Group
CME GROUP PUBLIC © 2023 CME Group. All rights reserved. 

The Global Copper Market: A Key Component of 

the Global Energy Transition

June 2023

Derek L. Sammann

Senior Managing Director

Global Head of Commodities, Options & International Options Markets

CME Group
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The majority of the world’s refined Copper is consumed by China who also maintains the largest Copper refining capacity

Copper Is One of the Largest Base Metals With Significant Global Applications 

Underground Mines

Open Pit Mines

• Copper is a metallic, chemical element listed on the 

Periodic Table of Elements as “Cu”, with atomic number 29. 

• Usually found in nature as a primary mineral (in an igneous 

rock), or reduced from Copper compounds such as 

sulfides, arsenides, chlorides and carbonates.

• Properties

- High ductility

- High malleability

- High thermal and electrical conductivity (second only to silver) 

- Resistant to corrosion 

• Mine Production(1)

- Chile-5.2 million MT

- Peru-2.2 million MT

- DRC-2.2 million MT

- China-1.9 million MT

- United States-1.3 million MT

- Russia-1 million MT

- Indonesia-920k MT

- Australia-830k MT

- Zambia-770k MT

- Mexico-740k MT

Refinery Production(1)

- China-11 million MT

- Chile-2.1 million MT

- DRC-1.7 million MT

- Japan-1.6 million MT

- Russia-1.1 million MT

- United States-1 million MT

- Republic of Korea-660k MT

- Germany-620k MT

- Poland-590k MT

- Kazakhstan-510k MT

Source: USGS
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S&P Global describes Copper as “The metal of electrification and an essential part of reaching the global goal of net-zero 

emissions by 2050”. As such, Copper demand is projected to double by 2050.

SUPPLY

• Copper is 100% recyclable and is one of the few materials that can be recycled 

repeatedly without loss of performance

• Current Copper resources are estimated to exceed 5 billion metric tons 

- Resources include reserves and undiscovered deposits predicted based on preliminary 

geological surveys.

• According to the United States Geological Survey (USGS), global Copper 

reserves are estimated at 870 million metric tons 

- Reserves are defined as deposits that have been discovered, evaluated and assessed to 

be profitable. 

DEMAND

• Estimated annual global Copper usage is 28 million metric tons (including 

approx. 9.8 million metric tons from recycled Copper)

• Most Copper produced in the world is used by the electrical and building 

industries

- Power transmission and generation, solar panels, wind farms

- Building construction, telecommunications 

- Transportation equipment, EV charging stations

- Industrial machinery, electrical and electronic products

- Automotive (motors, wiring, radiators, brakes and bearings)

Copper Supply Chain and Demand Dynamics

• Copper has a multitude 

of uses across industries 

and is pivotal in the 

energy transition

• Low and High-Grade 

Scrap is fed back into the 

smelting and refining 

stage

• Refined Copper is 

converted to blocks, 

sheets, plates, or 

profiles. 

• Sulfide and oxide ores 

are smelted and refined 

to produce a pure Copper 

cathode

Mining, Smelting, 

and Refining

Semi-Finished 

Goods Production

Fabrication of EndUse Products Scrap
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• How is Copper priced and hedged?

- Copper is traded and priced on derivatives exchanges like CME Group and the London Metals Exchange

- CME Group’s benchmark high-grade Copper contract is referenced by Commercial participants throughout the supply chain globally.

- CME Group Copper is priced in dollars and cents per pound and the current price of Copper is ~$4/pound. 

- Buyers and sellers can eliminate floating price risk by opening a position on an exchange. 

- For example, a Copper wire producer may want to lock in its raw material price by buying (‘going long’) Copper on CME Group. In the 

event that the price rises between the time that the wire producer puts a hedge on and the time that payment is due, the wire

producer can use the gains in its future account to offset the higher costs. 

• Who participates in the Global Copper Market?

- Industrial & Commercial participants: Physical Traders/Merchants, Miners, Utility Companies

- Financial players: Asset Managers, Hedge Funds, Pension Funds

- Banks: Index Desks, House Desks, Commercial Desks

- Retail Traders 

- Liquidity Providers 

Copper Pricing and Market Participation 
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Copper is a key component in all electricity-related technologies

• Copper is used in electricity-related infrastructure across numerous applications since 

it is a durable, highly conductive and efficient metal.

• EV adoption will significantly increase Copper demand

- EVs require 2.5x more copper than a conventional internal combustion engine. 

- The charging infrastructure is also Copper-heavy. In the power generation sector, it is offshore 

wind that requires the highest use of Copper.

• Market analysts across the board see the energy transition as a significant demand 

driver for Copper

- The IEA forecasts that the energy transition demand will account for 40% of total copper demand 

in a scenario where Paris Agreement goals are met

- S&P Global forecast that energy transition demand growth for Copper will outstrip non-energy 

transition demand through 2050 – by 2035 it could amount to 21 million metric tons out of a total 

market of 49 million metric tons

• CME Group has a highly liquid Copper futures and options market. In 2022, Copper 

futures traded 970,000+ metric tons or 2.1+ billion pounds per day, making it one of 

the most globally relevant industrial metals contracts in the world. 

Copper Is a Critical Component of the Global Energy Transition

Source: IEA, S&P Global

Share of energy transition 

in total demand for Copper

STEPS refers to a 

scenario where 

current stated 

policies are 

implemented. 

SDS refers to a 

scenario where Paris 

Agreement net zero 

goals are met.

Source: IEA
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Governments around the world continue to support the take up of EVs

Electric Vehicle (EV) Numbers are Surging, Increasing Demand for Copper

Source: : IEA analysis based on country submissions, ACEA, EAFO, EV Volumes and Marklines. 

1) Notes: BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. Electric car stock in this figure refers to passenger light-duty vehicles. In “Europe”, European Union countries, Norway, and the United Kingdom account for over 

95% of the EV stock in 2022; the total also includes Iceland, Israel, Switzerland and Türkiye. Main markets in “Other” include Australia, Brazil, Canada, Chile, Mexico, India, Indonesia, Japan, Malaysia, New Zealand, South Africa, Korea and 

Thailand. 

• After a decade of rapid growth, the global 

EV stock is at 15 million units in 2021, 

representing ~1% of the global fleet. The 

U.S. EIA projects that EVs will grow to 31% 

of the global stock by 2050.

• Similarly, the IEA estimates that by 2030, 

under a net zero scenario, EVs could 

represent 60% of new car sales, versus 

4.6% in 2020.

• EV construction and charging infrastructure 

are the key drivers of the projected increase 

in demand for copper through 2050.

• Additionally, transmission and distribution 

(the infrastructure required to carry 

electricity from one place to another) is 

expected to be another key driver of 

increased Copper usage in energy transition 

end markets.

Global Electric Car Stock in Selected Regions(1)
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Copper will continue to be one of the preeminent commodities as a sign of economic health and its role in the energy transition

• Copper is one of the most important base metals because of its 

wide usage in many sectors of the economy. 

• The demand for Copper has been a reliable leading indicator of 

global economic health, as YoY change in prices correlates well 

with the ISM Manufacturing PMI and S&P 500 Index. 

• The demand for Copper is likely to be driven by energy transition 

end markets, including transmission and distribution, EV and 

charging infrastructure needs, Solar PV, wind, and battery storage. 

• However, demand from non-energy transition end markets is also 

expected to continue to grow, rising at a CAGR of 2.4% between 

2020 and 2050. 

• The anticipated Copper shortfall which is projected to begin in the 

middle of the decade will have serious consequences across the 

global economy. 

Increasing Copper Needs and the Forthcoming Supply-Demand Gap

Breakdown of Global Refined Copper Usage

Global Copper Market Balance

Source: IHS Markit, S&P Global 
CME GROUP PUBLIC © 2023 CME Group. All rights reserved. 

CME Group’s Role in the Global Copper Market
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CME Metals Contracts

• Gold Futures & Options

• Silver Futures & Options

• Platinum Futures & Options

• Palladium Futures & Options

Precious Metals

Base Metals

• Copper Futures & Options

• Aluminum Futures & Options

• Aluminum Premium + Alumina Suite

Ferrous Metals

• Hot-Rolled Coil Steel Futures & 

Options (U.S. Midwest + European)

• Iron Ore Futures & Options

• U.S. Midwest Busheling Ferrous Scrap Futures

Battery Metals

• Cobalt Futures

• Lithium Carbonate Futures

• Lithium Hydroxide Futures

Complete Suite of Metals Futures and Options
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COMEX is a global leader in Copper Futures and Options and one of the best liquidity pools for electronic execution via CME Globex

COMEX Copper Market Overview 

• As economies boost their investments in infrastructure and renewable Energy 

initiatives, market participants are utilizing the transparency and global liquidity of 

CME Group’s Copper markets to manage price risk. 

• Futures: We continue to electronify the Copper market with screen-based Copper 

ADV representing over 99% of overall volume traded at COMEX(1). 

- High Grade Copper (Product Code: HG) – Benchmark Copper product

- Micro High-Grade Copper (Product Code: MHG) – Micro Copper, 1/10th the size of the full-size 

high-grade contract

• Options: We have evolved market structure by successfully delivering electronic 

liquidity into a historically voice brokered market to deliver a 5-year CAGR of +48%.

- Monthly Copper Options (Product Code: HX)

- Weekly Copper Options, Friday Expiry (Product Code: H1E – H5E)

- Weekly Copper Options, Monday & Wednesday Expiry (Product Code: HM1 – HM5, HW1 –

HW5)

• Financially Settled Copper Futures: Improved collateral and targeted outreach to 

attract new Commercial participants. Open interest ended 2022 with 176K MT.

Source: CME Group, CFTC.

(1) Based on 2022 volumes

(2) Through 6/2/2023 

ADV and Open Interest(2)

Copper Options Historical ADV by Shift (2)
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COMEX Copper’s liquidity profile has improved with growth in activity across all client segments 

• COMEX Copper clients benefit from a 

broad spectrum of counterparties; the 

more diverse a marketplace, the greater 

the liquidity and the lower the implicit 

trading costs.

• Clients also benefit from a wide range of 

Copper contracts offered at CME, 

including Copper Options, Financially 

Settled Copper Futures, Micro Copper, 

etc. 

• Trading outside of North America over the 

past 5 years has grown considerably, 

indicating the growing relevance of 

COMEX Copper globally

- Volumes ex-North America grew at a 16% 

CAGR from the 10-year period of 2012-2022

COMEX Copper Commitment of Traders Report (CFTC)

January 2009 Open Interest: 

76K Contracts/862K MT 

May 2023 Open Interest: 

215K Contracts/2.4M MT 

2.8x Growth in 

Overall Open 

Interest 

2.8x Growth in 

Physical 

Participation

4.3x Growth in 

Managed Money
CME GROUP PUBLIC © 2023 CME Group. All rights reserved. 14

38%

0%

10%

20%

30%

40%

50%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

CME Group Copper Futures ADV as % of LME 

Copper Forwards ADV (in metric tons)(1)

Sources: CME, Bloomberg, CFTC and LME. 

1) LME 3-month volume. 2023 volumes annualized using Jan-May activity. 

2) 2023 Annual Volume is annualized using Jan-May volumes for CME and LME

• As economies boost their investments in infrastructure and 

renewable Energy initiatives, market participants are utilizing the 

transparency and global liquidity of CME Group’s Copper markets 

to manage price risk. 

 Futures: We continue to electronify the Copper market with 

CME’s screen-based Copper volume representing 99% of 

overall volume traded.

 Options: We have evolved market structure by successfully 

delivering electronic liquidity into a historically voice brokered 

market to deliver a 5-year CAGR of +48% with LME +4%. 

CME Group Copper options set a record quarterly average 

daily volume of 8,633 contracts, and YTD ADV is +102% 

through May ‘23. 

 Financially Settled Copper Futures: Improved collateral and 

targeted outreach is attracting new Commercial participants. 

Average open interest YTD over 176K MT. 

Becoming the market of choice for Copper by meeting the needs of global physical market participants while adding new financial 

participants

CME Group Is Deepening Penetration of the Global Base Metals Market

Electronic Venue 2009 Annual Volume 2023 Annual Volume(2) CAGR

CME Globex 64 Million Metric Tons 284 Million Metric Tons 11%

LME Select 60 Million Metric Tons 108 Million Metric Tons 4%

2009-2023 CAGR:

CME Group Copper: +11%

LME Copper: +2%
Global Markets Advisory Committee

Panel 2: Mitigation Credits

Michael Rolband, Virginia Department of Environmental Equality 
Presentation to CFTC’s Energy and 

Environmental Markets Advisory Committee

Mitigation Credits: a Request for Technical 

Assistance

Mike Rolband, PE, PWD, PWS Emeritus

Director

June 27, 2023

Virginia Department of Environmental Quality
17

What is Mitigation Banking?

Restored Streams, wetlands or land 

conversion (limited to nutrients)

Public Works / 

Landowner

HOW IT WORKS

Adapted from The Washington Post, February 15, 1996

Under the market-oriented 

system, they can go to a “bank” 

created by a Bank Sponsor who 

has obtained credit for restoring 

impaired ecosystems elsewhere 

in the same portion of the 

rivershed. 

By purchasing mitigation credits from the Bank Sponsor, the 

mitigation requirements of a permit for impacts is satisfied. Restorers use 

this pooled money to create much larger, well-designed, & ecologically 

valuable conservation projects.

“Bank”

A Public Works 

Agency or private 

landowner needs to 

impact wetlands and 

streams, or develop 

uplands. In the past, 

they would have 

had to restore wetlands, 

streams or reduce 

nutrients from land 

development as 

compensation, either 

on- or off-site.
Mitigation Credits: a Request for Technical Assistance to 

Develop a Trading Platform for Wetlands, Streams and 

Nutrient Credits in Virginia

• Land Development projects in Virginia may impact wetlands and 

streams – and increase Nutrients in Stormwater Runoff

• Federal and/or State Regulations allow for a third-party trading 

system to supply mitigation for these impacts

• These Markets face periodic shortages and price jumps

• Commodities involved are Wetlands, Streams and Nutrient 

Credits

18
Report to the Virginia General Assembly – December 2022

“The fundamental problem of periodic 

mitigation credit shortages and resulting 

price jumps...is a combination of: 

1. Mitigation bank approval, 

construction, and credit release times 

that are slower than market demand 

time frames.

2. A lack of accurate and timely 

data on credit supply, demand and 

pricing- the hallmarks of a true “free 

market.”

19
3 Step Solution:

• Speed up Approval Process by 

Developing an MOA with The US 

Army Corps of Engineers to reduce 

duplication and create a schedule 

(Signed: March 29, 2023)

• Develop a Module in DEQ’s new 

Permitting Enhancement and 

Evaluation Platform (PEEP) system 

to track progress against the 

schedule (Live data: Feb 27, 2023)

• Develop a mitigation trading platform 

for Virginia – RFP in Preparation

20
The Result - DEQ Initiative #4: Commodity Trading Platform

• Develop trading platform for 

water-related commodities to 

provide transparency for 

permittees with regard to prices 

and supply and demand

• Assist market in meeting 

demands of a strong economy

• RFP development underway

• Coming in FY 2024!

21
Unique Aspects in Virginia

• Need the ability to allow investors to purchase and resell credits 

to increase capital availability and provide market liquidity

• Credits must expire when wetland and stream impacts 

commence, or land disturbance commences (for nutrients)

• Currently no trading of credits are allowed – resulting in 

“stranded” credits.

• There is a state law establishing maximum service areas based 

on watersheds, and some banks have additional physiographic 

limitations - so each bank has a semi-unique trading area

22
23
Thank you for your time!

The Virginia Department of Environmental Quality 

looks forward to learning if the Commodity Futures 

Trading Commission can help us in developing a 

commodity trading platform for wetlands, streams 

and nutrient credits.

24
Global Markets Advisory Committee

Panel 3: Subcommittee Kickoff
26

Alternate Secretaries

Lillian Cardona

Physical Energy Infrastructure

JonMarc Buffa

The Role of Metals Markets in Transitional Energy
27

Subcommittee Members

Physical Energy Infrastructure Subcommittee

• Dr. Tim Fitzgerald, Texas Tech University – Chair

• Dr. Evren Damar, Hobart and William Smith Colleges 

• Dr. Cortney Cowley, Federal Reserve Bank of Kansas City

• Rob Creamer, FIA PTG

• Demetri Karousos, Nodal Exchange, LLC

• Jackie Roberts, West Virginia Public Citizen Commission

• Dena Wiggins, Natural Gas Supply Association

• Matt Agen, American Gas Association

• Paul Cicio, Industrial Energy Consumers of America

• Frank Hayden, Calpine Corporation

• Paul Hughes, Southern Company

• Matt Picardi, Commercial Energy Working Group

• Sarah Tomalty, BP Energy Company

• Jeffrey Walker, ACES

• Peter Keavey, The CME Group
28

Purpose

Physical Energy Infrastructure Subcommittee

To provide a report to the EEMAC that will evaluate what is required 

to ensure the energy markets in the United States remain resilient 

despite the numerous strains on the system globally
29

Topics

Physical Energy Infrastructure Subcommittee

• Identify the state of infrastructure of various energy markets, including but not limited to, oil, 

natural gas, and electricity, and examining how investment in infrastructure in recent years has 

contributed to the current state of infrastructure

• Examine how the current state of energy infrastructure has impacted market fundamentals, such 

as supply and demand, price discovery, price volatility, and market participation 

• Identify key issues facing energy derivatives markets that are related to or a result of energy 

market fundamentals and dynamics

• Examine if and how financial regulation can address current issues in the energy derivatives 

markets
30

Subcommittee Members

The Role of Metals Markets in Transitional Energy 

Subcommittee

• Dr. Ian Lange, Colorado School of Metals – Chair

• Dr. Evren Damar, Hobart and William Smith Colleges 

• Dr. Cortney Cowley, Federal Reserve Bank of Kansas City

• Bill McCoy, Morgan Stanley

• Bob Anderson, Committee of Chief Risk Officers

• Greg Broussard, Cargill, Inc.

• Jean-Marc Monrad, Vitol, Inc.

• Frank Macchiarola, American Petreolem Institute

• John Murphy, Mizuho Securities USA, LLC

• Jamila Piracci, Life:Powered

• Sneha Bagri, OTC Global Holdings, LP

• Jin Chang, The CME Group
31

Purpose

The Role of Metals Markets in Transitional Energy 

Subcommittee

To provide a report to the EEMAC that will examine the role of 

critical metals in transitional energy sources and their potential 

impact on derivatives markets
32

Topics

The Role of Metals Markets in Transitional Energy 

Subcommittee

• Identify metals that are used as components in transitional energy sources and their related 

derivatives markets, or lack thereof

• Examine how the increased demand for certain metals impact existing derivatives markets

• Examine the issues around creating new derivatives markets for metals that will be integral in 

transitional energy 

• Examine if and how financial regulation should change given the increased demand on and need 

for metals derivatives markets
33

Subcommittees

• Meetings will likely be monthly, but cadence will be 

determined within each subcommittee

• Work plan/work schedule/report writing process will also 

be determined within each subcommittee

• First meetings will be in July
Global Markets Advisory Committee

Closing Remarks