At the LME, our objective is always to support our physical and financial communities with the products and services needed to manage price risk effectively. We have been working closely with the battery materials and electric vehicle (EV) industries to identify and serve their evolving risk management requirements.
As set out in our LME Sustainability discussion paper we are working to expand on our existing contract offering. Our LME Sustainabilty: Electric Vehicles factsheet summarises our offering for this sector.
Some key battery metals such as nickel, lead, copper, cobalt and aluminium are already well established on the LME. We plan to launch new futures contracts to provide further hedging and trading opportunities for battery materials. Our cash-settled LME Cobalt (Fastmarkets MB) contract was launched in 2019, and we are 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.