We’reheretoserveyourevolvingriskmanagementneedsandsupportthetransitiontowardsamoresustainablefuture.
LME–poweringallourfutures.
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ClickonanyofthemetalsymbolstodiscoverwhattheLMEprovidesfortheEVandbatteryindustries
TheLMEhasbeenworkingwiththeglobalaluminiumindustryforover40years,offeringtheentirevaluechaintheopportunitytohedgetheirpriceriskwithcontractsforprimaryaluminium,aluminiumalloys,regionalpremiums,aluminaandusedbeveragecans.
Aluminiumanditsalloysplayacentralroleinvehiclemanufacturing.Itisalreadyusedintheproductionofinternalcombustionengine(ICE)vehiclesanddemandissettoincreaseasEVadoptiongrows.Theaverageamountofaluminiumusedinelectricvehiclescanbeupto30%higherthaninICEvehiclesbecauseitislighterthanalternativematerialssuchassteel.Reducingtheweightofanelectricvehicleiscrucialforincreasingitsrange–forevery100kgofweightsaved,mileagecanincreasebyaround10%andbatterycostsmayreduceby20%.
Aluminiumisoftenthematerialofchoiceforthechassis,bodywork,structuralcomponents,likeshocktowers,internalpanels,andhousingformotorsandbatteries.
WideradoptionofEVscombinedwiththeimportanceofaluminiumfor“light-weighting”couldseethedemandforaluminiumincreasebyathirdby2040*.
Withourgrowingcontractsuitesupportingallstagesofthealuminiumindustry,theLMEprovidesstakeholdersthroughouttheEVvaluechainwiththetoolstohedgeandtradetheiraluminiumpricerisk.
TheLMEoffersbothphysicalandcash-settledcobaltcontracts.Ourphysicallysettledcobaltcontractlaunchedin2010,whileourcash-settledcontact,whichsettlesagainstFastmarketsMB’scobaltprice,joinedourbatterymaterialsofferingin2019.Thecontractsaredesignedtoallowmarketparticipantswhohaveexposuretothecobaltpriceintheirphysicalcontractstohedgeacrossthecobaltvaluechain.
Interestingly,cobaltismostoftenaby-productofeithernickelorcopperproduction,withjustasmallpercentagecomingfromprimarycobaltsources.
Cobaltiskeyforseveralbatterytechnologies,includingnickel-cadmium,nickel-metalhydrideandlithium-ionbatteries.Itisimportantforincreasingthesafety,energydensityandlongevityofbatteries,whichiscrucialforelectricvehicles.Around50%ofthecobaltproducedgloballyisusedforrechargeablebatteriesandinrecentyears,thedemandforcobaltforuseinlithium-ionbatterieshasgrownsignificantly.
Themostexpensiveofthebatterymaterials,cobalt’spricehasbeenvolatileandsusceptibletosupplyconstraints,ethicalconcernsandmovesbysomeautomanufacturerstoseekwaysofreducingdependenceoncobaltintheirbatteries.Evenso,industryexpertsforecastthatthebatteryindustrywillneedafurther100,000tonnesofcobaltby2025tomeettheprojecteddemandforEVs*.
OneofthefirstmetalstotradeontheLMEin1877,ourcoppermarketremainsthelargestintheworldintermsofrecordedvolumeandopeninterest–65%oftheglobalopeninterestincoppersitswithinLMECopperpositions.
AstheEVrevolutionpicksuppace,predicteddemandforcopperissettogrowbyninetotentimesby2030*.TheEV,energygenerationandenergystoragesectorswillneedincreasingamountsofcoppertomeettheirneedsinthecomingdecades.
Theaverageelectricvehiclecontainsover80kilogramsofcopper–incomparisontoaround25kilogramsusedinconventionalcars–andtheredmetalisusedforboththeextensivewiringfoundinthepowertransfersystemandelectrics,andinthebatteryitself.Atthesametime,duetoitshighlyconductivenature,copperisusedextensivelyinenergysystemsgenerating,storinganddeliveringthepowerfromsolar,wind,hydroandthermalenergysources.
Astheworldmovestowardsamoresustainablefuture,theserenewablesourcesofenergywillbecomecriticalinachievingclimategoals–andcopperwillbekeyforthistransition.
TheLMEhasalong-standingandcloserelationshipwiththesteelindustry,offeringasuiteofferrouscontractswhichprovidesteelproducers,processorsandconsumerswithinnovativeandeffectiveriskmanagementtools.
SteelhaslongbeenintegraltotheglobalcarindustryandwillcontinuetoplayavitalroleintheEVrevolutionandthetransitiontomorerenewableenergysources.Electricalsteel–manufacturedwithmagneticproperties–isusedinmotorsandtransformers,andisfavouredforitshighdurabilityandheatresistance.Exhaustsandsmallercomponentsaremadefromstainlesssteel.Advancedhighstrengthsteelisusedforbatterycasings,chassis,bodyworkandinstructuresthatprotectpassengers.ModernformsofsteelbeingusedbyEVmanufacturersarelighter,thinnerandstrongerthantraditionalsteels,helpingtooffsettheweightofanEVbatterywhilecontinuingtoofferhighpassengerprotection–creatingmorespaceforthebatteriesthemselvesandincreasingrange*.
Steel’susesaren’tonlylimitedtothemanufactureofelectricvehicles–itisinhighdemandforuseinthechargingstationsandenergystoragesystemsneededtopowerthetransportationofthefuture.Steelremainsacost-effective,highlyrecyclablemetalandlookssettoplayanimportantroleintheglobaltransitiontolowandzeroemissionvehicles.
Growingdemandforlithiumforbatteries,particularlyfromtheEVsindustry,hassignificantlyincreasedthemarketneedfortransparentpricingandeffectiverisk-managementtools.Wehavebeenworkingcloselywithlithiumproducers,automotivecompanies,batterymanufacturersandabroadrangeofothermarketparticipantstodeveloparobustlithiumcontractwhichwillsupporttherapidlyevolvingbatterymaterialssector.
TheLME’snewcash-settledlithiumfuturescontract–LMELithiumHydroxideCIF(FastmarketsMB)–willjoinourofferingforthebatterymaterialsindustryon19July2021.Thisbattery-gradehydroxidecontractwillallowstakeholdersthroughoutthelithiumsupplychain–fromthesourcetotheendusers–topricetheirsupplycontractseffectivelyandtomanagetheirpriceexposure.
TradedontheLMEsince1979,theLME’snickelcontractistheglobalreferencepriceforthenickelindustry.
Thefifth-mostcommonelementonearth,nickelismostoftenusedtomakestainlesssteel,orisalloyedwithothermetalsduetoitsanti-corrosiveandhigh-temperatureresistanceproperties.Itisalsoakeyinputintheproductionofnickelcadmium(NiCd)batteries,nickelmetalhydride(NiMH)batteriesandmorerecentlyinlithium-ionbatteries.
NickelispopularforEVsforitsbalanceofhighenergydensityandstoragecapacity,whichincreasesvehiclerangeandperformance.Thefirstwidelyavailablehybridelectriccar,theToyotaPrius,waspoweredbyNiMHbatteries.Morerecently,nickeldemandhasincreasedforuseinlithium-ionbatteries,andassomebatterychemistriestrendtowardagreaterquantityofnickelversusotherbatterymaterials,theneedislikelytogrowfurtherstill.From60,000tonnesin2018,demandfornickelforEVbatteriesisprojectedtogrowmorethantentimes,toaround665,000mtby2025.*
TheLMEisthehomeofgloballeadtrading.Officiallylaunchedin1920,ourleadcontracthasbeenthenaturalplacefortheleadindustrytomanagetheirpriceriskforthelastcentury.
Long-usedasthemainpowerstoreinlead-acidbatteriesforinternalcombustionengine(ICE)vehicles,leadstillhasaroletoplayforbothEVsandtheenergystoragesectors.Inexpensive,reliable,high-poweredandfullyrecyclable,12vlead-acidbatteriesremainthesolutioninEVstorunsystemsincludinginteriorandexteriorlights,airconditioningandwindows.
Withdemandforbatterymaterialssuchascobaltandlithiumlikelytoovertakesupplyintheshorttomediumterm,leadisexpectedplayamoreimportantroleinthestorageofenergygeneratedbyrenewablepowersources.Thisinturnwillfreeupmoreofthelighter,higherpowerdensitybatterymaterialstobeusedinEVs.
Tin,togetherwithcopper,hasbeentradedontheLMEsincetheExchangewasofficiallyestablishedin1877.
Weareallfamiliarwithtin’susethroughoutourday-to-daylives:infoodpackaging,inourportabledevices,inelectricalappliancesandeveninglass.But,astheEVrevolutionandmovetowardsmoresustainableenergysourcesgatherpace,tinwillhaveanewandcrucialroletoplayinthisnewlower-carbonworld.ItisanessentialinputforEVsandtheirbatteries,aswellasforrenewableenergygeneration,energystorageandtheelectronicsneededtocontrolanddistributethatenergy.
AccordingtotheInternationalTinAssociation,tindemandcouldrisebyupto60,000tonnesperyearforuseinEVsandenergystorageby2030.*Researchisalsolookingintotheapplicationsoftinalloysinvariousbatterytechnologies,includinglithium-ionandzinc-ionbatteries.Whenalloyedwithothermetals,tincanhelptocreatemorepowerfulconductivepathways,enhancingbatteryperformanceanddeliveringmoreefficientpowerdistribution.Itcanalsobeusedasaprotectivecoatingonanodes,improvingthestabilityofthebattery.
Zinccelebratedits100thyearoftradingontheLMEin2020.
Mostvehiclescontainzinc–indie-castcomponentsasathinprotectivecoatingonbodywork,componentsandweldsites,andevenintyres!Itismostoftenusedtogalvanisesteel,protectingthemetalunderneathfromcorrosion–around60%ofallzincconsumedisusedforgalvanisation.
Morestableandfireresistantthanotherbatterymaterials,researchcontinuesintofurtherdevelopingzincasabatterycomponent.Zinc’savailabilityandhighrecyclabilitymakeitanincreasinglyattractiveoption.In2020,thedemandforzincforuseinbatterieswas600tonnes,buttheInternationalZincAssociation(IZA)estimatesthatthisfigurecouldrisetoaround77,500tonnesby2030*.
Whilelithium’shighenergydensitymakesitalightweightoptionforusewithinEVs,zincbatteriesaremoresuitedto“stationary”uses,particularlyasamoreaffordableoption,forexample,inenergystorageanddeliverysystems.TheIZApredictsthatzinc’sshareofthestationarybatterymarketcouldrisefrom1%in2020to5%in2025to20%by2030.