LME: plans to launch lithium pricing scheme to pave the way for the launch of lithium futures contracts

Published: Jun 11, 2019 14:52

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(LME), the London Metal Exchange, said in a statement on June 10 that it planned to provide pricing for the lithium industry in a bid to provide a transparent and representative global lithium price for the market, further paving the way for LME to launch lithium futures contracts. LME will promote reference pricing in the industry in the coming months, after which LME will work with other industry participants to determine the best time to launch lithium futures contracts.

SMM6 11-the London Metal Exchange (LME) announced on June 10 that it plans to provide a pricing scheme for the lithium industry in order to provide a transparent and representative global lithium price for the market, which further paves the way for the launch of lithium futures contracts by LME.

Robin Martin, head of market development at LME, said lithium mine prices had fluctuated unprecedented in recent years due to the explosive growth in demand for lithium batteries. Previously, Soc., the world's second largest lithium producer, Quimica y Minera de Chile (SQM) says the fall in lithium prices is far from over. Lithium prices fell by 8% in the first quarter of 2019, but in the coming months, lithium prices are likely to fall by more than 25%.

The price of SMM lithium hydroxide has been declining continuously since last year, falling by about 12% in the first quarter of this year, and even more unstoppable after entering the second quarter. As of June 11, the price of lithium hydroxide was at a low of 87000 yuan per ton, down about 28 per cent from the start of the year.

Lithium hydroxide (56.5% battery grade coarse particles / domestic)

"look at the SMM lithium price chart

And now with the further development of electrification and low-carbon economy, the global market demand for lithium ore can not be underestimated.

Adamas Intelligence, a research firm, said the use of lithium carbonate equivalent (LCE) in batteries for new electric vehicles, plug-in hybrid vehicles and hybrid vehicles increased by 76 per cent in the year to February.

BloombergNEF also said that with the unstoppable trend of electric vehicles, the demand for lithium carbonate and lithium hydroxide for lithium-ion batteries will continue to grow, and the demand for lithium batteries will increase sixfold between 2020 and 2030.

So many industry participants, including manufacturers, end customers and several leading car companies, have approached LME to develop effective lithium price risk management tools.

LME will promote reference pricing in the industry in the coming months, after which LME will work with other industry participants to determine the best time to launch lithium futures contracts.

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LME lithium price

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