CME Group set to launch cobalt hydroxide futures next month

CME Group, one of the most prominent derivatives marketplaces globally, is set to introduce Cobalt Hydroxide futures on October 23, subject to relevant regulatory approvals. This move comes in response to the constantly evolving hedging requirements within the swiftly expanding electric vehicle (EV) sector.

The Cobalt Hydroxide futures will be financially settled based on Fastmarkets’ cobalt hydroxide price assessment. This is a significant step forward in the market, providing an effective means to hedge price fluctuations between standard-grade cobalt metal globally and local hydroxide prices delivered into China. China is a crucial player in the EV supply chain, refining hydroxide into battery-grade material.

The launch of Cobalt Hydroxide futures underscores the escalating demand for effective hedging mechanisms throughout the cobalt supply chain. As the battery raw material markets continue to evolve and the electric vehicle sector sees substantial growth, the necessity for risk mitigation tools becomes increasingly apparent. CME Group’s introduction of this futures contract based on Fastmarkets’ cobalt hydroxide price will be instrumental in empowering market participants to manage risk effectively in these dynamically changing markets.

These futures will complement Cobalt Metal futures, which have become the global benchmark for cobalt prices since their inception in December 2020. Trading volumes in Cobalt Metal futures have already exceeded the total for the preceding year, showcasing the growing interest and participation in this market. The open interest in Cobalt Metal futures has quadrupled over the last year, underscoring the industry’s growing interest in effectively managing cobalt price risks.

Overall, the introduction of Cobalt Hydroxide futures by CME Group is a crucial step in addressing the intricate hedging needs within the cobalt supply chain, particularly in the backdrop of the rapidly advancing electric vehicle market. The availability of these futures contracts will provide market participants with a vital tool to mitigate risks and navigate the market more effectively as it continues to evolve.

By QUATRO Strategies International Inc.

QUATRO Strategies International Inc. is the leading business insights and corporate strategy company based in Toronto, Ontario. Through our unique services, we counsel our clients on their key strategic issues, leveraging our deep industry expertise and using analytical rigor to help them make informed decisions to establish a competitive edge in the marketplace.

Elevate your business with QU4TRO PRO!

Gain access to comprehensive analysis, in-depth reports and market trends.

Interested in learning more?

Sign up for Top Insights Today

Top Insights Today delivers the latest insights straight to your inbox.

You will get daily industry insights on

Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Oversupply, battery market slowdown cause slump in cobalt prices

Cobalt, once hailed as a commodity with an endlessly rising price, has experienced a sharp decline in recent years due to global oversupply and a slowdown in the battery market. Most of the world’s cobalt supply comes from the Democratic Republic of the Congo (DRC)…

EU considering extension of emergency energy measures

The European Commission is contemplating an extension of emergency energy measures implemented last year to address the gas crisis in Europe. These measures were introduced in response to a significant reduction in gas deliveries by Russia, which led to a surge in energy…

EU planning to auction 244 million carbon permits between Jan.-Aug. 2024

The European Commission has announced plans to auction 244 million EU carbon permits from January to August 2024 under the European Union’s Emissions Trading System (ETS). The ETS is a cap-and-trade system that requires companies in the EU to pay for each ton of carbon…

Stay informed

error: Content is protected !!