Abaxx Commodities Exchange to Launch First Physically Deliverable Lithium Carbonate Contract
The Singapore-based Abaxx Commodities Exchange is set to introduce the first physically deliverable lithium carbonate futures contract outside China, company executives announced. The move follows the recent launch of its nickel sulphate futures, marking another milestone in its battery metals product lineup.
The new lithium carbonate contract addresses a gap in the market, as current contracts outside China are cash-settled. “All the other (lithium carbonate) contracts outside of China are cash-settled. So we see a clear demand and need,” said Sacha Lifschitz, Abaxx’s director of metals markets. The initiative aims to meet rising global demand for transparent pricing and reliable delivery mechanisms in the lithium market.
Abaxx is working closely with a major lithium carbonate producer to support the launch. Unlike lithium hydroxide, which is unsuitable for physical delivery due to storage limitations, lithium carbonate is well-suited for this type of contract.
The exchange’s nickel sulphate contract, the world’s first futures for this battery metal, began trading recently. It saw a block trade on the first day between Traxys and HNK Alpha, brokered by StoneX. Two approved brands from Zhejiang Huayou Cobalt currently back the contract, with Abaxx aiming to expand its list of brands and producers.
The nickel sulphate contract is priced in US dollars and allows for physical delivery in Singapore, with plans to add Rotterdam and Baltimore as delivery points. Abaxx’s delivery dates align with those of the London Metal Exchange (LME), ensuring compatibility with established industry practices. “You don’t have to reinvent the wheel. It’s what the industry is used to,” Lifschitz noted.
The launch of the lithium carbonate contract is expected within weeks, reinforcing Abaxx’s position in the battery metals market and providing a much-needed tool for global supply chain participants outside China. China’s Guangzhou Futures Exchange has seen growth in its lithium carbonate futures since their introduction in July 2023, but participation barriers for foreign entities remain.
