China’s QME Plans to Expand Commodity Offering on Spot Trading Platform

This could see the introduction of metals needed for electric vehicles.

China’s Qianhai Mercantile Exchange (QME) is planning on expanding the range of commodities on its spot trading platform. According to an article from Reuters today, this could see the introduction of metals needed for electric vehicles.

Located in Shenzhen, QME is owned by Hong Kong Exchanges and Clearing (HKEX). The exchange provides HKEX with access to mainland China. Back on October 19, 2018 QME launched spot trading for alumina, the raw material for aluminum.

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Matthew Chamberlain, the head of the HKEX-owned London Metal Exchange (LME) said this metal was added because there was not already a credible Chinese benchmark price for the ore.

Matthew Chamberlain, LME, HKEX, QME
Matthew Chamberlain
Source: Twitter

On Wednesday, Chamberlain told the Reuters Global Commodities Summit that: “It’s clear in our discussions that there’s a big niche for discovering the price of alumina in China and that will extend to a whole bunch of other commodities.”

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So, could that extend to metals used in the batteries of electric vehicles? According to Chamberlain: “We strongly believe that the idea of spot trading platforms could help across commodities, and why not battery metals? … Nothing’s off the table.”

LME eyes launch of cash-settled lithium futures contracts in 2020

On the LME, on the other hand, it will use two price-reporting agencies to establish a blend of prices as the benchmark for the cash-settled alumina contract, which it expects to launch at the beginning of next year.

In addition to this, the LME – the world’s oldest and largest market for industrial metals – also plans to add a cash-settled futures contract for cobalt, an electric vehicle metal, also set to be launched in early 2019, Chamberlain said. Following this will be lithium, which is set for a possible launch in 2020, he added.

At present, the QME has placed its emphasis on trading bulk and upstream physical commodities. This, according to Chamberlain, will complement the LME’s focus on futures.

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