First ever lithium futures contract in the world is brokered by SCB Group

, the low-carbon commodity brokerage, said it has brokered the first lithium cash-settled futures contract on the Chicago Mercantile Exchange (CME) last weekend.

Five minutes into the launch of CME’s new Lithium Hydroxide CIF CJK (Fastmarkets) futures contract on Sunday evening at 5:05pm Central Standard Time, five tonnes were traded between Mercuria and Traxys for June 2021 at $14.25/kg.

CME’s lithium hydroxide contract has the goal to help market participants manage their battery metals price risk, and follows the launch of a cobalt metal futures contract in December as part of CME’s new financial tool to help advance the global green transport transition.

The launch of a futures lithium hydroxide contract by CME is important for the lithium industry, said Martim Facada, battery materials broker at SCB Group.

“It will provide a very useful hedging tool for companies looking to manage their price risk and exposure to the lithium market. At the same time, it will offer the price visibility and transparency that the lithium market needs to help companies and governments in their decisions. At SCB Group, we are proud of working with the different stakeholders that want to get involved with this new contract,” he said.

“We are excited to have executed the first trades of lithium futures,” said Jean-François Steels, vice president of energy transition at Mercuria.

“These new contracts provide critical hedging needs and more efficient price discovery at a time when businesses are investing heavily in the production of batteries and electric vehicles. We applaud for being first to bring these solutions to the marketplace.” 

At Traxys, managing director of energy metal, Kevin Smith, said: “We are pleased with the launch of the new CME Lithium Hydroxide CIF CJK (Fastmarkets) futures contract and for SCB Group’s assistance in hedging our physical book. Traxys is excited to have been the first to trade lithium on an exchange anywhere in the world.”

SCB, which states its mission as helping promote the adoption of a low carbon future, said the increasing uptake of electric vehicles in tandem with continuously improving EV battery efficiency will ultimately result in global carbon emission reduction.

The broker said its battery materials team is closely aligned with the market’s needs and its offer is tailored to customers’ needs in commodities including lithium, cobalt and nickel.

To learn more about CME’s new Lithium Futures contract, please visit: https://www.cmegroup.com/trading/metals/other/lithium-futures.html