Posted on 01 Oct 2024
The Chicago Mercantile Exchange (CME) Group plans to include China spodumene concnetrate futures contract in its portfolio of lithium futures contracts, Kallanish learns
The 6% spodumene concentrate cif contract will be introduced on 28 October, subject to regulatory review. CME already has battery-grade lithium hydroxide and carbonate contracts also based on Fastmarket's spot prices.
"Our suite of cobalt and lithium products serve an important role in the rapidly evolving battery metals space, with industry adoption accelerating," said Jin Hennig, global head of metals at CME Group. "With this launch of spodumene futures, we will expand hedging capabilities, making it easier for the market to manage the price differences across products in the lithium value chain."
US lithium company Albemarle has welcomed the move, saying it complements the lithium market's "evolving" risk management needs. "We recognise that trust in physical prices underpins confidence in futures trading, and are proud that our bidding event price discovery initiative has added valuable transparency to the spot market," adds Peter Hannah, product pricing manager at Albemarle. "The combination of liquid and robust physical and futures pricing mechanisms can help our industry grow."
"Developing a liquid and transparent lithium market is essential for all the players in the battery value chain and CME Group continues to work towards this goal," says Grant Donald, chief commercial officer at Australian miner Liontown Resources."A forward curve for key materials across the entire supply chain will be essential to effectively manage price risk for the rapidly growing clean energy market."
The CME Group claims it is the leading marketplace for manageing battery metals risk, helping improve price transparency. It says that open interest in lithium hydroxide futures have surpassed 30,000 contrats for the first time this year and now extends through 2026. Interest in cobalt metal futures also remains "robust" and extends through 2028, the company notes.
Such trading at the London Metal Exchange, however, has been weaker.
Source:Kallanish
