LAC:CC - China's first-ever lithium futures plummet in trading debut

2023-07-21 11:19:24 ET

China's first-ever lithium futures market got off to a rocky start in the first day of trading, as sentiment is weighed by an anticipated surplus for lithium products in 2024, Bloomberg reported Friday.

Lithium carbonate on the Guangzhou Futures Exchange fell below the base settlement price of 246K yuan/ton (~$34,263) on Friday, with contracts for January delivery tumbling to as low as 215K yuan before paring losses to trade ~11% lower, and contracts for February to July fell by the 14% first-day limit.

Spot prices of lithium carbonate - a refined form of the metal - surged to a record in November as a global push toward electric vehicles sparked consumption, before plunging this year as supply pressures eased.

Participants hope the new contracts will provide more transparent lithium pricing, reduce volatility in spot prices and offer more effective ways for producers and buyers to hedge risk.

ETF: ( NYSEARCA: LIT )

Potentially relevant tickers include ( ALB ), ( SQM ), ( LTHM ), ( LAC ), ( PLL ), ( SLI ), ( SGML )

More analysis on lithium:

• LIT: Lithium Looks Ready To Get Electric Again
• LIT: Economic Weakness In China May Impact EV Sales
• Lithium Supplies May Not Be Enough To Meet EV Demand

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