China Guangzhou Exchange Readies Lithium Carbonate Futures, Options

The Guangzhou Futures Exchange（GFEX）, which started trading its first product silicon in December 2022, is expected to introduce lithium carbonate futures and options in the near future in year 2023 to help battery companies anticipate their costs amid wild price swings.



For futures contracts, the guidelines say the minimum transaction unit is one ton and the minimum price change is CNY50 (USD7) per ton. The biggest single-day increase and decline will be limited to 4 percent and the trading deposit should equal at least 5 percent of the contract value.

For options, the minimum price change is CNY10 per ton. The style will be American instead of European so holders are allowed to exercise the rights even before the day of expiration.

In China, prices of lithium carbonate have been volatile since the second half of last year. The precursor material has slowly become more expensive again after slumping due to sluggish car sales this year. However, the price is still 50 percent below a historic high of CNY600,000 (USD83,860) per ton reached in November.

The GFEX is the mainland’s fifth futures exchange, aimed at developing financial derivatives related to the green economy. So far the bourse only has one product, industrial silicon, while the plan is to add others involving electricity and carbon emission allowances.

 

Foreigners cannot trade it.

 

If they set up some entities in China,like a trading firm , then they can trade it.
Or they can use TRS(total return swap) with brokers, kind of OTC contract, to trade it.

 

Any US citizen who is even thinking about doing this oughta have their head examined

The Chinese government will accuse you of spying for the US, and seize your firm's assets

The US will accuse you of spying for the Chinese, or of failing to properly register as a "foreign agent," and put you in jail

 

But Elon Musk,for one example, is doing ok with some car factories in China. Maybe people can watch whether Tesla want to trade such lithium carbonate futures and options.

 

Well, sure, if you're prepared to spend a several million dollars on Chinese and American lawyers, then you should have no problem whatsoever setting up a company in China that is owned by US citizens. Good luck

 

Nice building!

 

That's Elon Musk. We are not Elon Musk. He's the second richest man in the world. He has more money than many of the countries in the world. He is creating jobs in China of course China is treating him well. Wait until he wants to withdraw his EV car factories from China and take all his money with him when China still needs him.

 

Sure, and his EV cars also need consumers in China so it's better to have factories near the market.

 

China rocks!