Benchmark Minerals and ICE team up for battery material futures

By Pratima Desai

LONDON (Reuters) -Prices of battery materials lithium and cobalt assessed by consultancy Benchmark Minerals Intelligence (BMI) will be used for contracts launched by Intercontinental Exchange (ICE) in June, BMI told Reuters.

For BMI, a price reporting agency (PRA), this is an important step in having its prices used to settle derivative contracts traded on exchanges, an area dominated by information firms Fastmarkets and S&P Global Commodity Insights.

An agreement between BMI and ICE signed earlier this year covers prices of lithium carbonate, lithium hydroxide, spodumene concentrate and cobalt hydroxide, BMI said. Spodumene concentrate contains lithium.

They are all crucial materials for lithium-ion batteries used in electric vehicles, a key plank of the global energy transition.

BMI said the contracts will be cash-settled and listed in London on ICE Futures Europe. New contracts typically need regulatory approval.

ICE declined to comment.

"BMI is the benchmark for lithium and critical mineral prices that settle billions of dollars of contracts," said BMI Executive Chairman Simon Moores.

Industry sources say BMI has pioneered price assessments for lithium, cobalt and critical minerals price reporting.

Approval by the International Organisation of Securities Commissions (IOSCO) indicates that BMI's assessment methodology has been reviewed and conforms with international best practices and standards.

In March, ICE Futures Europe President Chris Rhodes told the FT Global Commodities Summit in Switzerland that the exchange was planning to launch lithium, cobalt and spodumene derivatives in London this year.

At that time Rhodes said the advantage of these contracts on ICE is that many of the participants active in these markets are already managing their wider energy portfolio at ICE.

Last year, UK-based Global Commodities Holdings Ltd said it was working with ICE to create cash-settled derivatives contracts for nickel, also used in electric vehicle batteries. 

Commodity exchanges across the globe are seeking to capture strong expected growth in demand for minerals needed for electric vehicles and renewable energy.

CME Group and the London Metal Exchange (LME), owned by Hong Kong Exchanges and Clearing, offer futures in lithium and cobalt, while China's Guangzhou Futures Exchange has listed lithium carbonate futures.

Singapore-based Abaxx Commodities Exchange launched lithium carbonate and nickel sulphate contracts this year.

(Reporting by Pratima Desai; editing by Eric Onstad, Alexandra Hudson)