SMM

Futures contracts outline minimum physical and chemical specifications for the underlying commodity so that each lot of material is standardised – this is a crucial parameter for consistent price discovery. As high-tech products Lithium-ion batteries have harsh and high-standard requirements on raw materials. However, as a chemical product, lithium carbonate qualities vary among producers. How to reasonably price them with different qualities based on the prices from the futures market is hard, which also incur many issues in the market.