SGX derivatives contracts: Risk management in new energy metals
Read more about the SGX launch of four battery metal derivatives contracts, cash-settled against Fastmarkets’ lithium and cobalt price assessments
On September 26, SGX will launch four battery metal derivatives contracts, cash-settled against Fastmarkets’ lithium and cobalt price assessments. To read more about risk management in new energy metals and the details of the contracts, click through the slides below.
- Lithium and cobalt market sizes will grow rapidly as the electric vehicle battery industry takes off
- Lithium supply will continue to struggle to keep up with demand
- Increasing volatility is intensifying the requirement to hedge price risks
- Variations in prices of key raw materials have significant impacts on cathode and battery costs
- The complexity of the battery supply chain exposes numerous actors to risk
- The methodology and expertise from Fastmarkets have defined our status as a market-leading price reporting agency for more than 130 years
Why are risk management tools important?
- Hedge exposure to future price volatility
- Protect profit margins
- Increase certainty of cost budgeting and cash flows
- Improve procurement, planning and inventory requirements
- Secure financing for new projects or developments
- Mitigate counterparty risk