CME Group to Launch Cobalt Hydroxide Futures on October 23

Rhea-AI Summary

CME Group to launch Cobalt Hydroxide futures on October 23, expanding hedging options in the battery metals market.

Positive

• Cobalt Hydroxide futures will provide more hedging granularity for market participants in the global battery supply chain.
• Trading volume and open interest in Cobalt Metal futures have significantly increased over the past year.

Negative

• None.

CHICAGO, Sept. 18, 2023 /PRNewswire/ -- CME Group, the world's leading derivatives marketplace, today announced that it will launch Cobalt Hydroxide futures on October 23, pending all relevant regulatory reviews. This is the fourth battery metals futures contract CME Group has launched in response to evolving hedging needs within the rapidly growing electric vehicle space.

"CME Group is pleased to offer market participants in the global battery supply chain more hedging granularity with a cobalt hydroxide contract," said Jin Chang Hennig, Managing Director and Global Head of Metals at CME Group. "As demand continues to grow, it has become more important to manage the price risk between global, standard-grade cobalt metal and the local hydroxide price delivered into China, where hydroxide is refined into battery-grade material."

Cobalt Hydroxide futures will be financially-settled based on the Fastmarkets' cobalt hydroxide price assessment. 

Raju Daswani, CEO of Fastmarkets, added, "Evolving battery raw material markets and electric vehicle growth continue to drive demand for hedging mechanisms throughout the cobalt supply chain. The launch of the CME Group cobalt hydroxide futures contract, based on Fastmarkets' cobalt hydroxide price, ensures market participants have another tool to mitigate risk as these markets develop."

Cobalt Hydroxide futures are complementary to Cobalt Metal futures, which have become the global benchmark for Cobalt prices since launching in December 2020. Trading in Cobalt Metal futures has already surpassed its total trading volume in 2022, with over 21,000 contracts traded year-to-date. Open interest in Cobalt Metal futures has also quadrupled over the last year, growing from approximately 5,000 contracts in September of last year to 20,607 contracts, equivalent to over 20,600 metric tons, on September 5, 2023.

The new contract will be listed by and subject to the rules of COMEX under the product name Cobalt Hydroxide CIF China (Fastmarkets) futures. For full contract specs, or for more information on CME Group's battery metals products, please visit here.

As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex® platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, respectively. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.

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SOURCE CME Group