Lithium miners shake up trading to tackle wild price swings
lithium miners — facing an unprecedented demand surge and wild price swings — are shaking up the way the commodity is bought and sold.
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As lithium emerges as a linchpin of the global energy transition, the industry is in the grip of a slow-motion revolution that earlier upended commodities like iron ore: a push for more transparent and industry-wide pricing.
Albemarle Corp., the No. 1 lithium supplier, has held a series of auctions since March where potential buyers compete for cargoes via bids. These sales are a significant step for lithium, which until relatively recently was largely sold at prices fixed in long-term contracts.
For now, there’s a patchwork of spot price references — and nascent futures markets — but little consistency on how to value each unit of lithium as it flows along a supply chain from mines to electric vehicles.
“The auctioning of lithium does two things,” said Przemek Koralewski, global head of market development at price reporting agency Fastmarkets. “It allows miners to get the price of the day and it means that the contracts on which most material is sold is truly reflective of market dynamics.”
Ballooning demand from batteries and electric vehicles has transformed lithium from a niche metal into a closely-watched commodity pulling investment in the tens of billions of dollars. But it’s also triggered massive volatility and growing complexity.Iron ore miners faced a similar quandary in the first decade of the 21st
