CME Records 400% Jump in Battery-Metal Options as Cobalt Volatility Drives Hedging
Updated
Updated · Financial Times · Jun 30
CME Records 400% Jump in Battery-Metal Options as Cobalt Volatility Drives Hedging
1 articles · Updated · Financial Times · Jun 30
Summary
CME said second-quarter battery-metal options trading jumped more than 400% from a year earlier, while cobalt futures volumes hit a quarterly record and January averaged more than 1,200 contracts a day.
Cobalt trading has accelerated as price swings intensified after the Democratic Republic of Congo, the top producer, imposed export quotas to curb oversupply and lift prices, pushing traders and industrial users to hedge.
The exchange said users are extending positions out to December 2029, and demand is also rising for its lithium carbonate contract as lithium iron phosphate batteries gain share over chemistries using hydroxide and cobalt.
The broader battery-metals derivatives market is still small versus copper or aluminium, with the LME's cobalt contract up more than 250% this year while lithium trading remains concentrated in China.
As AI and EVs battle for battery metals, which trillion-dollar industry will face a supply crunch first?
Is the DRC's cobalt squeeze a temporary shock or the start of a new era of resource nationalism?
Battery Metal Markets 2026: Supply Shocks, Surging Demand, and the New Geopolitics of Critical Minerals
Overview
In 2026, the battery metals market saw a remarkable surge in options and futures trading, fueled by changing supply dynamics and the rising demand from the electric vehicle industry. The CME Group’s battery metals complex reached record activity, as more commercial users like battery manufacturers, automakers, and mining companies turned to these markets for price discovery and hedging. This led to greater participation and liquidity. Lithium and cobalt futures soared by 45% and 65% year to date, making these contracts essential tools for managing risk and helping businesses plan and invest confidently despite market volatility.