Electric vehicle rush fuels optimism at LME Asia Week – by Melanie Burton and Tom Daly (Reuters U.S.- May 18, 2018)


HONG KONG (Reuters) – Rising demand for battery materials cobalt and lithium infused some optimism into an otherwise cautious London Metal Exchange (LME) Asia Week, amid a backdrop of slowing growth in China and escalating trade tensions between it and the United States.

In the event’s first ever session on battery materials in Hong Kong, Chinese cobalt producers such as Jinchuan Group International Resources and Wanbao Mining said they were ramping up production to sate an anticipated demand boom from electric vehicles (EVs).

That is a market that the LME hopes to tap with the launch of cash-settled cobalt and lithium contracts, slated for late this year or early next year.

This would be in addition to the physically deliverable cobalt contract which some miners are already using to hedge.

Ma Weiguo, executive vice president of Beijing-based Wanbao Mining, said price hedging was critical for his company and that the LME cobalt contract was favorable in terms of reacting to price volatility. “Personally I would not like to make a huge profit but rather a long-term stable margin,” Ma said.

For the rest of this article: https://www.reuters.com/article/us-lmeweek-asia-wrap/electric-vehicle-rush-fuels-optimism-at-lme-asia-week-idUSKCN1IJ185

Comments are closed.