As set out in the LME Strategic Pathway in September 2017 we are in the process of delivering new risk-management tools for battery materials and electric vehicle (EV) industries.
We are working with global market participants along the value chain to identify and serve the evolving risk management requirements of these industries. Some key battery metals such as nickel, lead, copper, cobalt and aluminium are already well established on the LME. Our aim is to launch new futures contracts to provide further hedging and trading opportunities for battery materials, starting with our cash-settled LME Cobalt (Fastmarkets MB) contract, and working in partnership with Fastmarkets MB to develop a transparent and robust pricing solution for lithium.
With over 140 years at the heart of global metals markets, the LME is uniquely placed to provide effective risk-management solutions for the whole EV value chain, from miners through to the end users. As an independent infrastructure provider servicing the global industry the LME is able to help identify, shape and consolidate the divergent and often competing views of the EV market.
The London Metal Exchange (LME) is working closely with the global lithium industry to discuss their needs for transparent and robust pricing solutions. Unprecedented lithium price volatility, driven particularly by EV battery demand, has significantly increased market need for effective pricing and price risk-management tools.
We have been approached by market participants from across the value chain from producers through to end users to develop effective lithium price-risk management tools. We've established the LME Lithium Committee, which is an advisory body including key participants from across the lithium industry. Find out more here.
As always, the LME is working closely with industry to design effective products which best meet market requirements. In 2018 we tendered a request for proposal with leading price reporting agencies (PRAs) with the objective of selecting the lithium market’s preferred price assessment provider.
The PRAs presented to our EV Working Group in October 2018, and after thorough and extensive consultation with the market, we have selected Fastmarkets as our lithium pricing partner.
Fastmarkets has a substantial pricing presence in the EV space, with prices which are already used in physical lithium supply deals. They have extensive experience in developing globally-accepted and IOSCO-compliant reference prices and indices.
The LME and Fastmarkets are working together on a joint market engagement programme to reinforce use of Fastmarkets’ prices, and when the market is ready, to launch LME lithium futures contracts to help the lithium community manage price risk.
Every Friday, midpoint spot prices for lithium carbonate and lithium hydroxide are published on our lithium prices page.
We will update this page regularly with further details of our events and education programme, so please check back for more information.
You can find out more about our lithium plans from these upcoming events and webinars:
LME Metals Seminar 2019
The metals seminar will include a panel discussion on 'The EV revolution: what is the reality for metals markets?'
Monday 28 October 2019
LME Focus Day 2019 - Battery Materials Session
Will Adams of Fastmarkets will give the analyst's view of the market outlook for battery materials, followed by a panel featuring industry experts discussing the evolution of the lithium market
Thursday 31 October 2019