Lithium Miners Shake Up Trading to Tackle Wild Price Swings – by Annie Lee and Yvonne Yue Li (Bloomberg News – May 19, 2024)

(Bloomberg) — The world’s lithium miners — facing an unprecedented demand surge and wild price swings — are shaking up the way the commodity is bought and sold. 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.

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