1. A small market with a few producers often means producer pricing dominates as the producers are in a strong negotiating position 2. As EV & ESS markets grow rapidly, a more transparent and efficient way to price raw materials will be needed 3. How much simpler would it be if a cathode manufacturer could buy lithium, cobalt and nickel basis benchmark prices and seli the cathodes on at the cost of raw materials plus their manufacturing margin. The price risk passes down through the supply chain 4. Transparent and accurate prices 5. Each party could price independently. Agree to buy or sell specific material at an unknown average price for future delivery but can lock in a fixed price with the exchange when it suits you. 6. Futures provide purchasing departments a the ability to hedge their price risk. 7. Futures enable banks to offer project finance as they can hedge the price risk.
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