The London Metal Exchange is looking at lithium, ferrochrome and some minor metals as potential contracts, but the process of assessment is still in its early stages, Chief Executive Garry Jones told Reuters. "Lithium is one we are looking at, at the request of the market and some minor metals after the disaster with Fanya Exchange," Jones said, ahead of a gathering of the global metal industry for LME Week.
The Fanya Metals Exchange was founded in 2011 with the aim of giving China greater global control over the supply and price of 14 strategic and rare metals. But earlier this year, Chinese authorities said illegal activity took place at Fanya exchange, which ceased operations last year amid accusations by investors that it was running a multibillion-dollar Ponzi scheme.
Lithium meanwhile has become a major focus for investors, given its use in batteries for electric cars. Prices of battery grade lithium in China surged above $20,000 a tonne this summer, nearly three times higher than a year earlier. Estimates vary, but IHS Automotive expects electric vehicles to represent nearly 4 percent of all light vehicles worldwide by 2020, equivalent to 3.9 million cars, up from just over 14,000 in 2010.
Surging stainless output in China, at 11.73 million tonnes between January and June, up 7.9 percent from the first six months of last year has pushed up demand and consumers are looking for a way to benchmark prices. In early August the exchange said it was planning to launch spot and futures contracts for gold and silver in the first half of 2017, adding to its list of products which includes copper and aluminium, zinc, lead, tin and nickel. It is working in collaboration with the World Gold Council, an industry body backed by gold mining companies such as Barrick Gold and Goldcorp, and is supported by five banks and proprietary trader OSTC, which have committed to provide liquidity.
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