Abaxx plans lithium carbonate contract within weeks after nickel launch

Abaxx Technologies

13/01/2025 12:30

By Eric Onstad
       LONDON, Jan 13 (Reuters) - The Singapore-based Abaxx
commodities exchange plans to launch a physically deliverable
lithium carbonate contract within weeks after the recent start
of its nickel futures, company executives said.
    The exchange, owned by Canada-listed Abaxx Technologies Inc
 ABXX.NLB , kicked off trading of its nickel sulphate contract
on Friday, the first for its battery products.
    Outside China, there are currently no lithium carbonate
futures contracts that are physically deliverable, said Sacha
Lifschitz, director of metals markets at Abaxx, who formerly
worked for trading houses Glencore and Concord Resources.
    "All the other (lithium carbonate) contracts outside of
China are cash-settled. So we see a clear demand and need,"
Lifschitz told Reuters.
    China's Guangzhou Futures Exchange has seen strong growth in
its lithium carbonate futures since their launch in July 2023,
but there are hurdles for foreigners to participate. 
    Lithium hydroxide, another processed form of the mineral
used in electric vehicle batteries, was not suitable for a
physically delivered contract because it cannot be stored for
any length of time.  
    Abaxx was working with a major producer of lithium carbonate
to support the contract, Lifschitz added.
    The exchange's nickel contract is the world's first futures
in nickel sulphate and saw a block trade on the first day
between trader Traxys and HNK Alpha, brokered by StoneX, Abaxx
said in a statement.
    There are two approved brands for the contract, both from
producer Zhejiang Huayou Cobalt  603799.SS , but Abaxx hopes to
add more brands and producers, Lifschitz said.
    Abaxx had delayed the launch of the nickel sulphate contract
after BHP  BHP.AX , which had backed the initiative, announced
the suspension of its Kwinana nickel sulphate refinery and other
facilities in Western Australia.
    The nickel sulphate contract is priced in dollars and
physically deliverable in Singapore, but additional delivery
points in Rotterdam and Baltimore are expected to be added.
    Abaxx's nickel contract has some parallels with the world's
more liquid and active nickel contract on the London Metal
Exchange  CMNI3 .
    The Abaxx delivery date is the third Wednesday of every
month, which is the same date that LME contracts expire, while
the Abaxx daily settlement price occurs at 1330 London time,
shortly after the official LME nickel price is determined. 
    "You don't have to reinvent the wheel. It's what the
industry is used to," Lifschitz said. 

 (Reporting by Eric Onstad; Editing by Jan Harvey)
 ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO;
 Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))