BEIJING, Nov. 6 (Xinhua) -- China's securities regulator on Friday announced it recently approved the registration of lithium hydroxide futures and options on the Guangzhou Futures Exchange.
The introduction of lithium hydroxide futures and options marks an important step in expanding China's scope of futures products and strengthening financial support for green development, the China Securities Regulatory Commission said in a statement.
Lithium hydroxide is a key raw material for high-nickel ternary lithium batteries used in new energy vehicles. It also has potential applications in emerging fields, such as low-altitude aircraft and embodied artificial intelligence.
China is the world's largest producer and consumer of lithium hydroxide. It also leads the world in lithium processing technology, with about 90 percent of the world's capacity for extracting lithium from ore through smelting located in China.
Li Yusheng, chair of the Lithium Branch of the China Nonferrous Metals Industry Association, said the new contracts could help translate China's industrial scale into greater pricing influence by promoting the use of domestic futures settlement prices in international trade.
They could also improve the allocation of global lithium resources by providing forward-looking signals on supply and demand, helping safeguard industrial and supply chain security, Li added.
The Guangzhou Futures Exchange began trading futures and options on lithium carbonate, another important material used in battery manufacturing, in July 2023.
Market insiders said the launch of lithium hydroxide futures and options will complement the existing lithium carbonate futures and options, further expanding the risk management tools available to the lithium industry.
Ganfeng Lithium, a major lithium producer, told Xinhua in a written response that the launch of lithium hydroxide futures and options could help companies maintain stable operations.
The contracts will enable companies to lock in processing margins and hedge against inventory devaluation, making their business operations more predictable, the company said.
The Guangzhou Futures Exchange said it will make preparations for the smooth launch of futures and options for lithium hydroxide in the next step.
