The cross-commodity price reporting agency Fastmarkets, has announced a proposal to adjust its lithium price assessments, as a response to the changing dynamics of the battery supply chain and market shifts following the enactment of the Inflation Reduction Act (IRA) in the US.
The IRA, a landmark legislation signed into law in 2022, is expected to influence trade flows significantly, potentially creating distinct price categories for materials compliant with the IRA and those that are not. This distinction underscores the growing complexity and regionalization of the lithium market, a critical component in battery manufacturing for electric vehicles and energy storage solutions.
Fastmarkets proposes to refine its existing Europe/US lithium spot battery-grade and technical-grade lithium hydroxide and carbonate price assessments by removing the US component. Instead, it plans to introduce weekly price assessments specifically for the US and Canadian markets. These new assessments, to be published weekly, are designed to provide more accurate and region-specific pricing information, catering to the unique needs of North American stakeholders.
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The proposed changes include detailed specifications for both the amended Europe price assessments and the new US and Canadian lithium price assessments. These specifications cover the quality, quantity, location, timing, and unit of measurement for transactions, ensuring that the assessments reflect market realities accurately.
Fastmarkets pioneered spot battery-grade and technical-grade lithium hydroxide and carbonate price assessments for the US and Europe and has been providing pricing data for these since 2017. Its assessments are crucial for settling contracts and have been adopted by major exchanges like the CME Group, the London Metal Exchange, and the Singapore Exchange.
According to the announcement, the consultation period for the proposal is set for 45 days, from February 12 to March 28, 2024.
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