SMM, October 12: On the evening of October 8, GFEX issued the "Announcement on Publicly Soliciting Opinions on Lithium Hydroxide Futures and Options Contracts and Related Rules," in which the business rules for lithium hydroxide futures and options (draft for comments) mentioned that the trading unit of lithium hydroxide futures contracts is 1 mt/lot. The quotation unit of lithium hydroxide futures contracts is yuan (RMB)/mt. The minimum price fluctuation of lithium hydroxide futures contracts is 20 yuan/mt. The maximum order quantity per transaction instruction for lithium hydroxide futures contracts is 1,000 lots, and the minimum order quantity per transaction instruction is 1 lot. The exchange may adjust these based on market conditions and issue a separate announcement. The daily price limit for lithium hydroxide futures contracts in months before the delivery month is 5% of the settlement price of the previous trading day, and the daily price limit in the delivery month is 7% of the settlement price of the previous trading day.
According to SMM's understanding, the "preparation" for the listing of lithium hydroxide futures was mentioned as early as 2023. In July 2023, lithium carbonate futures, a core lithium chemical product for power batteries, was officially listed on GFEX. At that time, GFEX repeatedly stated that it would accelerate the R&D and listing of new energy futures products such as polysilicon and lithium hydroxide. This plan has been steadily implemented in recent years: polysilicon futures was listed for trading on December 26, 2024. In July 2025, GFEX again stated on multiple occasions that it would accelerate the R&D of platinum-palladium and lithium hydroxide futures products, continuously enhance market service capabilities, and better meet the risk management needs of the real economy in the process of low-carbon transition. On November 27, 2025, platinum-palladium futures, which had previously been mentioned together with lithium hydroxide, was successfully listed on GFEX. Currently, lithium hydroxide futures has entered the stage of public consultation, marking a key step toward its official listing.
During GFEX's preparation for lithium hydroxide futures, some enterprises have already begun applying for the qualification of GFEX-designated delivery warehouses for lithium hydroxide. On June 2 this year, Yahua Group issued the "Announcement on Applying for GFEX-Designated Delivery Warehouse for Lithium Hydroxide," which mentioned that the company's application for the GFEX-designated delivery warehouse for lithium hydroxide would help the company organically integrate the spot market, futures market, and delivery warehouse, further enhance the company's risk resistance capability and market competitiveness, and have a positive impact on the company's future business channel expansion and profitability improvement.
Chengxin Lithium also issued the "Announcement on Applying for GFEX-Designated Delivery Warehouse for Lithium Hydroxide" on June 13 this year, which mentioned that the application for the GFEX-designated delivery warehouse for lithium hydroxide would help further expand the company's visibility and influence in the industry and improve the company's standardized management. At the same time, it would help the company organically integrate the spot market, futures market, and delivery warehouse, further enhance the company's risk resistance capability and market competitiveness, and improve the company's profitability.
On December 8, 2025, Tianqi Lithium also issued the "Announcement on Applying for GFEX-Designated Delivery Warehouse for Lithium Hydroxide," which mentioned that lithium hydroxide is one of the company's core products, and the application for the GFEX-designated delivery warehouse for lithium hydroxide would help further expand the company's visibility and influence in the industry and improve the company's standardized management; at the same time, it would help the company organically integrate the spot market, futures market, and delivery warehouse, further enhance the company's risk resistance capability and market competitiveness, and improve the company's profitability.
In addition, in March 2026, Tianqi Lithium had already included lithium hydroxide futures in its proposed hedging targets in advance. The company mentioned in its announcement that the commodity futures hedging business it plans to conduct is limited to lithium chemical futures and options products directly related to the company's production and operations, such as lithium carbonate and lithium hydroxide.
Moreover, according to SMM's earlier understanding, as early as H1 2026, some traders had already made advance arrangements in anticipation of the futures listing, and the number of merchants participating in lithium hydroxide import trade increased significantly. Overall, the preparation for the listing of lithium hydroxide futures is progressing in an orderly manner, with positive official statements and accelerated industrial support. After GFEX issued the call for comments, the market as a whole adopted a wait-and-see attitude. SMM will continue to follow developments related to the listing of lithium hydroxide futures and provide timely follow-up reports.
Lithium hydroxide spot prices have fluctuated frequently over the past four years, with the price center in H1 this year shifting significantly higher YoY
According to SMM's understanding, in terms of spot prices, lithium carbonate and lithium hydroxide spot prices are strongly correlated. Taking battery-grade (coarse-particle) lithium hydroxide as an example, in 2022, battery-grade lithium hydroxide spot prices followed lithium carbonate prices upward all the way, reaching a peak of 560,000 yuan/mt on November 11, 2022. After entering 2023, lithium hydroxide spot prices began a downward trajectory. Although prices occasionally pulled back, they were far from the glory of 2022.
Since entering 2026, the lithium hydroxide price center has shifted significantly higher compared with 2024 and 2025. Looking at H1 average prices, according to SMM spot price data, in H1 2026prices rose to approximately 153,000 yuan/mt, an increase of about 127% compared with the same period in H1 2025.
The following is a detailed look at the monthly changes in lithium hydroxide prices in H1:
In January, lithium hydroxide prices shot up sharply. Affected by concentrated maintenance at major lithium chemical plants, spot supply tightened. Coupled with the continued climb in lithium carbonate and lithium ore costs, lithium chemical plants held prices firm, driving the monthly average price up 65% MoM. Although ternary cathode material enterprises maintained just-in-time procurement and were cautious about spot orders, and the price spread between Chinese and overseas markets triggered some import backflow, the phased shortage and cost support still pushed prices to highs.
In February, lithium hydroxide prices consolidated at highs, and market trading turned sluggish. Driven by macro sentiment, lithium prices declined overall, but smelters' sentiment to hold prices firm remained. Downstream ternary plants had sufficient stockpiles and some enterprises entered maintenance, easing raw material shortages, with procurement mostly centered around monthly average prices. During the Chinese New Year, transportation of lithium hydroxide stalled due to its hazardous chemical properties, and the market entered a seasonal quiet period; post-holiday restocking demand was mediocre, prices lacked upward momentum, and the month maintained wild swings.
In March, the increase narrowed significantly. Battery cell manufacturers' cargo pick-up pace fell short of expectations, new orders for ternary cathode materials were limited, and with increased customer-supplied materials mid-month, spot order demand dropped sharply. Market trading was sluggish, the upward price channel was blocked, and the monthly average price only edged up 3.4% MoM.
In April, prices first declined and then rose. In the first half of the month, new ternary orders were limited, spot order demand was muted, and prices were slightly under pressure; in the second half, driven by pre-holiday stockpiling and new orders, ternary plants increased inquiries, and coupled with the sharp rise in lithium carbonate and lithium ore prices, lithium hydroxide prices strengthened, with the monthly average price up 2.73% MoM.
In May, prices retreated after rapid rise. In the first half of the month, driven by expectations of improving demand and supply-side disruptions, lithium carbonate and lithium ore prices rose, driving lithium hydroxide prices up in tandem; in the second half, lithium market sentiment weakened, traders and material plants increased point-price transactions, and with the ternary demand trend already set, upstream enterprises' resolve to hold prices firm loosened, and prices saw a slight correction. The monthly average price reached 174,000 yuan/mt, up 13.6% MoM.
In June, prices pulled back significantly, with heightened volatility in range-bound trading. Supply disruptions in lithium resources occurred frequently, market fluctuations amplified significantly, suppliers were cautious, and prices followed market conditions. Upstream enterprises adjusted prices flexibly, and traders maintained deep discounts (more than 15,000 yuan/mt below the most-traded lithium carbonate futures contract). On the demand side, total ternary cathode material demand remained weak MoM, but in the 135,000-145,000 yuan/mt range, downstream buyers showed strong willingness to stockpile at lows, forming a certain bottom support and intensifying the range-bound price fluctuations. The monthly average price fell 11.52% MoM.
From the price trend perspective, SMM believes that the correlation between lithium hydroxide prices and lithium carbonate futures prices has strengthened over the past six months. The reasons are twofold: on one hand, upstream enterprises use the "lithium carbonate price × discount coefficient" method in pricing as a floor price; on the other hand, traders utilize the lithium hydroxide and lithium carbonate-lithium hydroxide price spread between Chinese and overseas markets by importing lithium hydroxide and selling with reference to lithium carbonate futures prices, further reinforcing this price linkage.
Entering July, domestic lithium hydroxide prices showed a sustained drop. The monthly average price fell 6.8%. During the month, lithium market sentiment was subdued due to long-term expectations, and market prices moved sideways in a narrow range. Affected by this, suppliers became cautious in trading, with strong sentiment to hold prices firm; as downstream orders were almost in line with expectations, procurement plans were relatively conservative, with small restocking at lows, and overall trading was sluggish throughout the month. For the entire month, lithium hydroxide market prices hovered around 130,000-140,000 yuan/mt.
In August, domestic lithium hydroxide spot prices showed a consolidation pattern, with the monthly average price down 2% MoM. From a fundamental perspective, some upstream production lines resumed production, driving production to increase more than expected, and market circulation expanded accordingly; while demand-side purchase willingness for raw materials was weaker than expected, downstream buyers were cautious in purchasing, and price increases lacked effective drivers. Overall, the trading atmosphere during the month was mediocre, and the price range was maintained at 128,000-136,000 yuan/mt.
Entering September, lithium hydroxide spot prices fell steadily, with the monthly average price down 6.77% MoM. Lithium hydroxide production in September was around 30,000 mt, basically in line with expectations. Among them, the main supply from smelting enterprises mostly maintained original production levels according to production schedules, with relatively stable output in recent months; it is expected that maintenance at some enterprises in late Q4 may bring certain fluctuations. On the demand side, domestic EV market demand in September remained weak, with cathode plants mainly consuming inventory, weak enthusiasm for production and raw material procurement, and overall production schedules declining significantly; the overseas EV market maintained a good demand trend.
In October, the domestic EV market recovered slightly, but the extent was limited and difficult to return to the peak levels of Q2 and Q3. During the National Day holiday, mine production resumptions and construction progress will continue to affect the medium- and short-term release of lithium resources, and the UK may formulate tariff alternatives targeting Chinese automobiles, which could disturb market sentiment. Against this backdrop, overall lithium hydroxide supply and demand in September-October is expected to remain in a slight deficit, and the supply-demand trend is basically in line with expectations. Therefore, SMM expects lithium hydroxide prices to continue moving sideways in the short term.
As of October 9, domestic battery-grade (coarse-particle) lithium hydroxide spot prices were at 108,000-117,000 yuan/mt, with an average price of 112,500 yuan/mt.
Lithium hydroxide futures open for public comment - what do institutions think?
Regarding the significance of the listing of lithium hydroxide futures, multiple institutions have already made comments:
Funeng Futures stated that GFEX is accelerating the R&D of lithium hydroxide futures, planned to be launched before the end of 2026, forming a complement to the already-listed lithium carbonate futures and building a "carbonate-hydroxide dual futures" risk management tool system. The significance of the listing of lithium hydroxide futures is mainly reflected in three aspects: first, it provides hedging tools for upstream smelters and downstream cathode producers, locking in processing fees and raw material costs; second, with both lithium carbonate and lithium hydroxide futures available, lithium carbonate-lithium hydroxide price spread arbitrage can be conducted, improving lithium chemical pricing efficiency; third, it helps form a public and continuous lithium hydroxide price benchmark, enhancing China's pricing influence in global lithium chemical trade.
Hua'an Futures commented that the listing of lithium hydroxide futures not only completes the hedging tools for the high-nickel ternary sector but is also an important piece of the lithium chemical derivatives system. The two-way coordination of lithium hydroxide and lithium carbonate futures provides precise hedging of price fluctuation risks for upstream and downstream enterprises in the industry chain, while injecting a more substantial Chinese price anchor into the global lithium market, helping the lithium battery industry develop steadily and sustainably.
Haitong Futures mentioned that, as understood, lithium hydroxide is a fundamental lithium chemical product with an important position in the lithium industry chain and is the core raw material for producing ternary lithium battery cathode materials. With the rapid development of industries such as NEVs, the low-altitude economy, and embodied AI, China has become the world's largest producer and consumer of lithium hydroxide. Affected by multiple factors such as industrial policies, production cycles, and technological progress, lithium hydroxide spot prices have fluctuated significantly in recent years, and industrial enterprises have a strong demand for hedging.
A relevant person in charge at GFEX stated that in the next step, GFEX will carefully review and study opinions and suggestions from all parties, further improve the contracts and rules in accordance with relevant laws, regulations, and GFEX business rules, ensure that the contracts are close to industrial reality, promote the listing of lithium hydroxide products as soon as possible, and advance the futures market's role in serving the high-quality development of the lithium battery industry.
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