* For Reuters coverage of LME Week, click on
LONDON, Oct 31 (Reuters) - CME Group, the world's largest futures market operator, said on Tuesday it would launch a copper premium Shanghai contract to build on a surge in copper trading on its Comex exchange.
The London Metal Exchange (LME) is the dominant venue for copper trading but copper volumes on the LME fell 4.1 percent last year while Comex saw volumes increase almost 30 percent.
CME said the premium contract, which it aims to launch on Nov. 20, would be settled against Chinese spot copper prices calculated by Metal Bulletin.
The LME does not offer a China copper premium contract.
"Our new copper contract will provide the first, financial settled exchange-traded futures product to enable customers and market participants to hedge their exposure to the China copper premium," said Young-Jin Chang, CME's head of metals.
"We believe this new contract, which will complement CME Group's existing physically delivered benchmark COMEX copper futures, will become a reference price for copper traded in or delivered to China."
The new contract will settle against the Metal Bulletin Copper Grade A Cathode CIF Shanghai assessment of copper spot price transactions in China, CME said. (Reporting by Peter Hobson; Editing by Mark Potter)