China's Guangzhou Futures Exchange (GFEX) is scheduled to launch lithium carbonate futures contracts and options on 21 July, after it obtained approval from China's Securities Regulatory Commission on 10 July.
The GFEX on 14 June released a draft for public comment on its plan to launch these contracts and options, with the standard material to be battery-grade lithium carbonate with a minimum content of 99.5pc.
The futures contracts are designed to provide risk-hedging tools and price discovery to help companies in the whole industrial chain to better manage operating costs, market participants told Argus. Domestic lithium producers including Zhicun Lithium, Jiangxi Jiuling, Yongxing New Energy, Yinli New Energy and Chengxin Lithium will be GFEX's designated producers for deliveries.
"Some consumers have also showed interest in the [lithium carbonate] futures trading, while some are still observing how it will go," a source at a lithium producer told Argus. "Whether it will be successful depends on the trading volume after the launch."
Argus forecasts that global lithium consumption will reach 2.78mn t/yr by 2030, mainly driven by demand from the electric vehicle (EV) battery segment. Argus most recently assessed spot prices for 99.5pc lithium carbonate at 290,000-305,000 yuan/t ($40,036-42,107/t) ex-works on 17 July, up by 63pc from late April, when prices started to rebound from a downturn. Fluctuations in lithium feedstock prices in the past few years have raised concerns about the impact on the uptake of EVs.