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.

Key takeaways:

  • 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

For more information, contact:

Peter Hannah
Senior price development manager

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