Lithium futures contract short-term impact on the existing trading system industry insiders: long-term industrial chain will benefit

"as the current pricing of lithium products fluctuates with the market, lithium futures contracts have little impact on actual sales in the short term." In response to the launch of the world's first lithium futures contract, a lithium product manufacturer told the Financial Associated Press, "but in the long run, a more transparent and reasonable price system will be formed, and the industrial chain will benefit."

Recently, CME Chicago Futures Exchange launched the first lithium futures contract, with China, Japan and South Korea CIF lithium hydroxide price as the settlement target, the first transaction price is 14.25 US dollars / kg. And the recent spot lithium hydroxide (China, Japan and South Korea cif) price fastmarkets quoted price of 12.50-13.50 US dollars / kg.

Some analysts believe that the lithium industry lacks authoritative exchanges to participate in quotation, the spot price is easy to be manipulated, and there is a serious disconnection between domestic and foreign prices, which causes some obstacles for enterprises in the industrial chain to judge lithium price. The above industry insiders believe that at present, in the spot order transactions of lithium products, the industry makes small fluctuations in the standard transaction price. As there are many factors affecting specific products, and long-term agreement orders are in the way of agreed price adjustment, lithium futures contracts have little impact on the existing trading methods in the short term.

It is understood that futures contracts are priced for standardized products, but at present battery companies and car companies in the industry have different quality requirements for lithium salt. On the other hand, overseas car companies and battery companies have a higher certification threshold for lithium salt, and it is difficult for downstream enterprises to directly purchase exchange standards as raw materials. This means that it is inevitable that there is a price difference between different product specifications.

The relevant person in charge of Shengxin Lithium Energy (002240.SZ) said that the sustained and healthy development of the lithium industry chain requires a good pricing mechanism, and enables upstream and downstream enterprises to obtain reasonable profits from the development of the industry chain. The introduction of lithium hydroxide futures will significantly enhance the price transparency of the lithium salt market, make the product market pricing more fair, conducive to market supply and demand and price stability, and then promote the healthy development of the whole industry chain.

Xiao Hui, expert of Whale platform think tank and product manager of ABS/PS Division of Beijing Silian Venture Chemical Group Co., Ltd., also holds the same view. He believes that the emergence of lithium futures contracts can provide more ways of price discovery through different buyers and sellers. Buyers can buy in advance and lock in costs when prices rise; sellers can also sell in advance, lock in reasonable profits and digest inventory through futures. Generally speaking, the introduction of lithium hydroxide futures is conducive to promoting the upstream and downstream enterprises of the industrial chain to achieve win-win results.

"Lithium futures contracts are expected to be good for the transparency, speed and convenience of trading in the global market." Li Bo, the chief executive of Tianqi Lithium Industry (002466.SZ), also told reporters at today's performance presentation meeting. In the long run, many people in the industry believe that futures contracts have the functions of price discovery and hedging. With the introduction of lithium hydroxide futures, enterprises can also reduce the risk caused by price fluctuations through hedging transactions and improve their anti-risk ability.

For the importance of lithium futures contracts, Xiao Hui further analyzed that with the arrival of 5G, industrial Internet of things, scene applications, new energy vehicles, lithium application development is stronger, this is the future trend. Therefore, the upstream mining industry, producers, intermediate traders and downstream terminals all hope that the price will be stable. The introduction of lithium futures not only provides more protection to the market, but also plays a positive role in industrial innovation.