CME Lithium Futures

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Overview
The rapid growth of electric vehicles and large-scale battery storage applications for electronic devices is increasing Lithium demand – and price risk. Lithium futures offer price transparency and efficient risk management and will be financially settled each business day of the contract month, based on monthly average of assessments published by Fastmarkets, a leading commodities benchmark data provider.

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Review preliminary contract specifications
CONTRACT TITLELithium Hydroxide CIF CJK (Fastmarkets) Futures
CME GLOBEX/CME CLEARPORT CODELTH
RULEBOOK CHAPTER646
SETTLEMENT TYPEFinancial
CONTRACT SIZE1,000 kg (kilograms)
LISTING SCHEDULEMonthly contracts listed for twelve (12) consecutive months. Add a new contract month after the nearby expiry.
PRICING QUOTATIONU.S. dollars and cents per kilogram
FIRST LISTED MONTHMay 2021
MINIMUM PRICE FLUCTUATION$0.01 per kg
VALUE PER TICK$10.00
BLOCK TRADE MINIMUM THRESHOLD2 contracts – subject to a minimum 15-minute reporting window
TERMINATION OF TRADINGTrading terminates on the last Thursday of the contract month. If this is not a U.S. business day, trading terminates on the prior U.S. business day.
CME GLOBEX MATCHING ALGORITHMFirst in First Out (FIFO)
TRADING AND CLEARING HOURSCME Globex: Sunday - Friday 6:00 p.m. - 5:00 p.m. Eastern Time/ET (5:00 p.m. - 4:00 p.m. Central Time/CT) with a 60-minute break each day beginning at 5:00 p.m. ET (4:00 p.m. CT)
CME Globex: PreOpen: Sunday 5:00 p.m. – 6:00 p.m. ET (4:00 p.m. – 5:00 p.m. CT). Monday – Friday 5:45 p.m. – 6:00 p.m. ET (4:45 p.m. – 5:00 p.m. CT)
CME ClearPort: Sunday – Friday 6:00 p.m. – 5:00 p.m. ET (5:00 p.m. – 4:00 p.m. CT) with a 60-minute break each day beginning at 5:00 p.m. ET (4:00 p.m. CT)


SOURCE: CME Group




CME Seeks to Tap Electric-Car Demand With Lithium Futures
Contracts tied to the battery metal could make pricing more transparent

Commodities exchange operator CME Group Inc. plans to launch a futures contract for lithium, seeking to capitalize on growing demand for a metal that helps to power electric vehicles.

The contract will be for lithium hydroxide delivered to China, South Korea and Japan, where most batteries globally are produced, CME said Thursday. If the futures contract is approved by regulators, it will begin trading on May 3.

Allowing lithium to trade freely on an exchange could help shed more light on historically opaque prices for the metal, a key ingredient in rechargeable batteries for smartphones, laptops and electric vehicles. Market participants currently rely on assessments from commodities-data trackers such as Benchmark Mineral Intelligence, S&P Global Platts and Fastmarkets.

Lithium’s role in powering rechargeable batteries has made it a strategically important commodity as governments seek to limit carbon emissions. The U.S. is racing to catch up with China in mining and refining the metal to support its auto industry and tackle climate change.

SOURCE: WSJ





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Crissa

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Market trading increases fluidity...

...but requires a standard product, which lithium does not come in yet.

And it comes at the risk and cost of non-consumer market players tying up the supply (this happened in the aluminum supply and chocolate supply a few years ago, and has happened to silver many times in US history).

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Market trading increases fluidity...
Is that all?


...but requires a standard product, which lithium does not come in yet.
Say what?


And it comes at the risk and cost of non-consumer market players tying up the supply (this happened in the aluminum supply and chocolate supply a few years ago, and has happened to silver many times in US history).
Say what?
 

Crissa

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Is that all?
Yes. These markets mostly burden the trade with profit-taking. The liquidity can help... Sometimes. Did you know this was so egregious that some commodities are banned from trading, such as onions?

Say what?
This is specifically for lithium hydroxide, for instance, which Tesla doesn't use.

Say what?
https://www.cnbc.com/2014/06/03/how-aluminum-became-a-cash-cow-for-goldman.html

https://www.businessinsider.com/armajaro-releases-stocks-as-cocoa-bet-melts-2010-12
(The article doesn't mention it, but many companies who depend upon stable chocolate prices were hurt.)

https://en.wikipedia.org/wiki/Cornering_the_market#19th_century:_Classic_examples_by_Edwin_Lefèvre

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Yes. These markets mostly burden the trade with profit-taking. The liquidity can help... Sometimes.
https://www.investopedia.com/terms/f/futuresmarket.asp


Did you know this was so egregious that some commodities are banned from trading, such as onions?
Trying to corner the market usually ends badly(Nelson Bunker Hunt, Bruno Iksil).

This is specifically for lithium hydroxide, for instance, which Tesla doesn't use.
TESLA TO BUILD LITHIUM HYDROXIDE REFINERY IN TEXAS TO FEED TERAFACTORY; FIRST AUTOMAKER TO ENTER LITHIUM (EXCLUSIVE)
exclusive-tesla-becomes-first-automaker-to-enter-lithium-supply-chain-reshapes-foundations-of-china-dominated-spodumene-2
 

Crissa

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Weirdly doesn't contradict me. Also the source would be a teensy bit biased towards the existence of markets.

The investors don't 'take on' risk. They exit the market when there's risk. https://en.wikipedia.org/wiki/Onion_Futures_Act

Trying to corner the market usually ends badly(Nelson Bunker Hunt, Bruno Iksil).
It's pretty bad for the companies that rely on the commodity, too.

Hmm. I wonder what that says.

Oh, yes, that Tesla skips that market.

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Yeah, it says Tesla processes their own spodumene into lithium hydroxide. So they don't buy it.
Correct, but you said "This is specifically for lithium hydroxide, for instance, which Tesla doesn't use."

Tesla will use lithium hydroxide at Giga Austin.
 

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If lithium becomes a tradeable commodity lets hope it doesn't go the way of lumber...SHEEEEEESH!

But I have a feeling it will because of inflation/money printing, "supply chain issues" and "...you will own nothing, have no privacy and be happy..." WEF.
 

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