SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested 

Registered Entity Identifier Code (optional): 23-453 (1 of 2)

Organization: Commodity Exchange, Inc. ("COMEX")

Filing as a: DCM SEF DCO SDR 

Please note - only ONE choice allowed.

Filing Date (mm/dd/yy: 11/22/23 Filing Description: Initial Listing of the Lithium 

Hydroxide CIF CJK (Fastmarkets) Average Price Option and Cobalt Metal (Fastmarkets) 

Average Price Option Contracts

SPECIFY FILING TYPE 

Please note only ONE choice allowed per Submission.

Organization Rules and Rule Amendments

Certification § 40.6(a)

Approval § 40.5(a)

Notification § 40.6(d)

Advance Notice of SIDCO Rule Change § 40.10(a)

SIDCO Emergency Rule Change § 40.10(h)

Rule Numbers: 

New Product Please note only ONE product per Submission.

Certification § 40.2(a) 

Certification Security Futures § 41.23(a)

Certification Swap Class § 40.2(d)

Approval § 40.3(a)

Approval Security Futures § 41.23(b)

Novel Derivative Product Notification § 40.12(a)

Swap Submission § 39.5

Product Terms and Conditions (product related Rules and Rule Amendments)

Certification § 40.6(a) 

Certification Made Available to Trade Determination § 40.6(a)

Certification Security Futures § 41.24(a)

Delisting (No Open Interest) § 40.6(a) 

Approval § 40.5(a)

Approval Made Available to Trade Determination § 40.5(a)

Approval Security Futures § 41.24(c)

Approval Amendments to enumerated agricultural products § 40.4(a), § 40.5(a)

“Non-Material Agricultural Rule Change” § 40.4(b)(5)

Notification § 40.6(d)

Official Name(s) of Product(s) Affected: See filing.

Rule Numbers: See filing.
20 S Wacker Dr Chicago, IL 60606 T 312 466 7478 tim.elliott@cmegroup.com cmegroup.com

1

Timothy Elliott

Managing Director and Chief Regulatory Counsel

Legal Department

November 22, 2023

VIA ELECTRONIC PORTAL

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, DC 20581

Re: CFTC Regulation 40.2(a) Certification. Initial Listing of the Lithium Hydroxide CIF 

CJK (Fastmarkets) Average Price Option and Cobalt Metal (Fastmarkets) Average 

Price Option Contracts.

COMEX Submission No. 23-453 (1 of 2)

Dear Mr. Kirkpatrick:

Commodity Exchange, Inc. (“COMEX” or “Exchange”) is certifying to the Commodity Futures Trading 

Commission (“CFTC” or “Commission”) the initial listing of the Lithium Hydroxide CIF CJK (Fastmarkets) 

Average Price Option and the Cobalt Metal (Fastmarkets) Average Price Option contracts (the “Contracts”) 

for trading on the CME Globex electronic trading platform and for submission for clearing via CME ClearPort 

effective Sunday, December 10, 2023, for trade date Monday, December 11, 2023, as noted in the table 

below:

Contract Title Lithium Hydroxide CIF CJK 

(Fastmarkets) Average Price Option

Cobalt Metal (Fastmarkets) 

Average Price Option

CME Globex and

CME ClearPort Code LHO COO

Rulebook Chapter 700 690

Underlying Futures Contract / 

Commodity Code

Lithium Hydroxide CIF CJK 

(Fastmarkets) Futures / LTH

Cobalt Metal (Fastmarkets) Futures / COB

Contract Size 1,000 kilograms 2,204.62 pounds

Price Quotation U.S. dollars and cents per kilogram U.S. dollars and cents per pound

Minimum Price Fluctuation $0.01 per kilogram $0.01 per pound

Value per Tick $10.00 $22.0462

Option Exercise Style European

Settlement Type Financial

Listing Schedule Monthly contracts listed for twenty-four 

(24) consecutive months

Monthly contracts listed for the current year 

and the next four (4) calendar years

Initial Listing January 2024

Termination of Trading Trading terminates on the last U.S. 

business day of the contract month.

Trading terminates on the last UK business 

day of the contract month. If this is not a U.S. 

business day, trading terminates on the prior 

U.S. business day.

Strike Price Increment $0.25 per kg $0.25 per lbs.

Strike Price Listing Schedule Minimum at-the-money strike at $0.25 

per kilogram increment plus dynamic 

strikes at $0.25 per kilogram increment.

Minimum at-the-money strike at $0.25 per 

pound increment plus dynamic strikes at 

$0.25 per pound increment.
20 S Wacker Dr Chicago, IL 60606 T 312 466 7478 tim.elliott@cmegroup.com cmegroup.com

2

Block Trade Minimum 

Threshold and Reporting 

Window

2 contracts - subject to a 15-minute reporting window

CME Globex Match Algorithm K - Configurable

Trading and Clearing Hours CME Globex Pre-open: Sunday 4:00 p.m. - 5:00 p.m. Central Time/CT 

Monday – Thursday 4:45 p.m. - 5:00 p.m. CT

CME Globex Open: Sunday 5:00 p.m. - Friday 4:00 p.m. CT with a daily 

maintenance period from 4:00 p.m. - 5:00 p.m. CT

CME ClearPort: Sunday 5:00 p.m. - Friday 4:00 p.m. CT with no reporting Monday -

Thursday from 4:00 p.m. - 5:00 p.m. CT

The Exchange reviewed the designated contracts market core principles (“Core Principles”) as set forth in 

the Commodity Exchange Act (“CEA” or “Act”) and identified that the Contracts may have some bearing on 

the following Core Principles:

• Availability of General Information: The Exchange will publish information on the Contracts' 

specification on its website, together with daily trading volume, open interest and price information.

• Contracts Not Readily Subject to Manipulation: The Contracts are based on a cash price series 

that is reflective of the underlying cash market and is commonly relied on and used as a reference 

price by cash market brokers and commercial market participants.

• Compliance with Rules: Trading in these Contracts will be subject to Chapter 4 of the Exchange 

rules which includes prohibitions against fraudulent, non-competitive, unfair and abusive practices 

and will be subject to extensive monitoring and surveillance by CME Group’s Market Regulation 

Department. The Market Regulation Department may use its investigatory and enforcement power 

where potential rule violations are identified during its regular surveillance reviews.

• Prevention of Market Disruption: Trading in the Contracts will be subject to the Rules of COMEX 

which include prohibitions on manipulation, price distortion, and disruption to the cash settlement 

process. As with any new product listed for trading on a CME Group designated contract market, 

trading activity in the Contracts proposed herein will be subject to monitoring and surveillance by 

CME Group’s Market Regulation Department.

• Position Limitations or Accountability: The speculative position limits for the Contracts as 

demonstrated in this submission are consistent with the Commission’s guidance.

• Financial Integrity of Contracts: The Contracts will be cleared by the CME Clearing House which 

is a registered derivatives clearing organisation with the Commission and is subject to all 

Commission regulations related thereto.

• Execution of Transactions: The Contracts will be listed for trading on the CME Globex electronic 

trading and for clearing through CME ClearPort. The CME Globex electronic trading venue provides 

for competitive and open execution of transactions. CME Globex affords the benefits of reliability 

and global connectivity.

• Trade Information: All requisite trade information for the Contracts will be included in the audit 

trail and is sufficient for the Market Regulation Department to monitor for market abuse.

• Protection of Market Participants: COMEX Rulebook Chapters contain multiple prohibitions 

precluding intermediaries from disadvantaging their customers. These rules apply to trading on all 

Exchange’s competitive venues and will be applicable to transactions in these Contracts.
20 S Wacker Dr Chicago, IL 60606 T 312 466 7478 tim.elliott@cmegroup.com cmegroup.com

3

• Disciplinary Procedures: Chapter 4 of the Rulebook contains provisions that allow the Exchange 

to discipline, suspend or expel members or market participants that violate the Rulebook. Trading 

in the Contracts will be subject to Chapter 4, and the Market Regulation Department has the 

authority to exercise its enforcement power in the event rule violations in this product are identified.

• Dispute Resolution: Disputes with respect to trading in the Contracts will be subject to the 

arbitration provisions set forth in Chapter 6 of the Rulebook. Chapter 6 allows all non-members to 

submit a claim for financial losses resulting from transactions on the Exchange to arbitration. A 

member named as a respondent in a claim submitted by a non-member is required to participate 

in the arbitration pursuant to Chapter 6. Additionally, the Exchange requires that members resolve 

all disputes concerning transactions on the Exchange via arbitration.

• Daily Publication of Trading Information: The Exchange will publish information regarding 

trading volume, open interest and price information daily on its website and through quote vendors 

for the Contracts.

Pursuant to Section 5c(c) of the Act and CFTC Regulation 40.2(a), the Exchange certifies that the Contracts

comply with the Act, including regulations under the Act. There were no substantive opposing views to this 

proposal.

The Exchange certifies that this submission has been concurrently posted on the CME Group website at 

http://www.cmegroup.com/market-regulation/rule-filings.html.

Should you have any questions concerning the above, please contact the undersigned at (312) 466-7478

or via e-mail at CMEGSubmissionInquiry@cmegroup.com.

Sincerely, 

/s/ Timothy Elliott

Managing Director and Chief Regulatory Counsel

Attachments: Exhibit A: COMEX Rulebook Chapters 690 and 700

Exhibit B: Position Limit, Position Accountability, and Reportable Level Table in Chapter 5

 of the COMEX Rulebook (attached under separate cover) 

Exhibit C: Exchange Fees

Exhibit D: COMEX Rule 588.H. – (“Globex Non-Reviewable Trading Ranges”) Table

Exhibit E: COMEX Rule 300.20. – Strike Price Listing and Exercise Procedures Table 

Exhibit F: Cash Market Overview and Analysis of Deliverable Supply 
4

Exhibit A

COMEX Rulebook

Chapter 690

Cobalt Metal (Fastmarkets) Average Price Option

690100. SCOPE OF CHAPTER

This chapter is limited in application to put and call average price options on Cobalt Metal 

(Fastmarkets) Futures contract. In addition to the rules of this chapter, transactions in options on 

Cobalt Metal (Fastmarkets) Futures shall be subject to the general rules of the Exchange insofar as 

applicable.

690101. OPTION CHARACTERISTICS

The number of contract months open for trading at a given time shall be determined by the Exchange.

690101.A. Trading Schedule

The hours of trading for this contract shall be determined by the Exchange.

690101.B. Trading Unit

A Cobalt Metal (Fastmarkets) Average Price put option traded on the Exchange represents the cash 

difference between the exercise price and the settlement price of the Cobalt Metal (Fastmarkets)

Futures multiplied by 2,204.62, or zero, whichever is greater. A Cobalt Metal (Fastmarkets) call option 

traded on the Exchange represents the cash difference between the settlement price of the Cobalt 

Metal (Fastmarkets) Futures and the exercise price multiplied by 2,204.62, or zero, whichever is 

greater.

690101.C. Price Increments

Prices shall be quoted in U.S. dollars and cents per pound. The minimum daily trading price 

fluctuation and minimum daily settlement price fluctuation shall be $0.01 per pound. The minimum 

final settlement price fluctuation shall be $0.01 per pound.

690101D. Position Limits, Exemptions, Position Accountability and Reportable Levels

The applicable position limits and/or accountability levels, in addition to the reportable levels, are set 

forth in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations 

& Special Notices Section of Chapter 5. 

A Person seeking an exemption from position limits for bona fide commercial purposes shall apply 

to the Market Regulation Department on forms provided by the Exchange, and the Market Regulation 

Department may grant qualified exemptions in its sole discretion. 

Refer to Rule 559 for requirements concerning the aggregation of positions and allowable 

exemptions from the specified position limits.

690101.E. Termination of Trading

The option shall expire at the close of trading on the last day of trading of the underlying Cobalt Metal 

(Fastmarkets) Futures contract.

690101.F. Type of Option 

The option is a European-style option cash settled on expiration day.

690102. EXERCISE PRICES AND CHARACTERISTICS

Transactions shall be conducted for option contracts as set forth in Rule 300.20.

690103. DISCLAIMER

See NYMEX/COMEX Chapter iv. (“DISCLAIMERS”) incorporated herein by reference.
5

Chapter 700

Lithium Hydroxide CIF CJK (Fastmarkets) Average Price Option

700100. SCOPE OF CHAPTER

This chapter is limited in application to put and call average price options on Lithium Hydroxide CIF 

CJK (Fastmarkets) Futures contract. In addition to the rules of this chapter, transactions in options 

on Lithium Hydroxide CIF CJK (Fastmarkets) Futures shall be subject to the general rules of the 

Exchange insofar as applicable.

700101. OPTION CHARACTERISTICS

The number of contract months open for trading at a given time shall be determined by the Exchange.

700101.A. Trading Schedule

The hours of trading for this contract shall be determined by the Exchange.

700101.B. Trading Unit

A Lithium Hydroxide CIF CJK (Fastmarkets) Average Price put option traded on the Exchange 

represents the cash difference between the exercise price and the settlement price of the Lithium 

Hydroxide CIF CJK (Fastmarkets) Futures multiplied by 1,000, or zero, whichever is greater. A

Lithium Hydroxide CIF CJK (Fastmarkets) call option traded on the Exchange represents the cash 

difference between the settlement price of the Lithium Hydroxide CIF CJK (Fastmarkets) Futures and 

the exercise price multiplied by 1,000, or zero, whichever is greater.

700101.C. Price Increments

Prices shall be quoted in U.S. dollars and cents per kilogram. The minimum daily trading price 

fluctuation and minimum daily settlement price fluctuation shall be $0.01 per kilogram. The minimum 

final settlement price fluctuation shall be $0.01 per kilogram.

700101D. Position Limits, Exemptions, Position Accountability and Reportable Levels

The applicable position limits and/or accountability levels, in addition to the reportable levels, are set 

forth in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations 

& Special Notices Section of Chapter 5. 

A Person seeking an exemption from position limits for bona fide commercial purposes shall apply 

to the Market Regulation Department on forms provided by the Exchange, and the Market Regulation 

Department may grant qualified exemptions in its sole discretion. 

Refer to Rule 559 for requirements concerning the aggregation of positions and allowable 

exemptions from the specified position limits.

700101.E. Termination of Trading

The option shall expire at the close of trading on the last day of trading of the underlying Lithium 

Hydroxide CIF CJK (Fastmarkets) Futures contract.

700101.F. Type of Option 

The option is a European-style option cash settled on expiration day.

700102. EXERCISE PRICES AND CHARACTERISTICS

Transactions shall be conducted for option contracts as set forth in Rule 300.20.

700103. DISCLAIMER

See NYMEX/COMEX Chapter iv. (“DISCLAIMERS”) incorporated herein by reference.
6

Exhibit B

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

Position Limits, Position Accountability and Reportable Level Table

(attached under separate cover)

 
7

Exhibit C

Exchange Fees

Lithium Hydroxide CIF CJK (Fastmarkets) Average Price Option (Commodity Code: LHO)

Member Non-Member

CME Globex $3.00 $6.00

Block $4.00 $7.00

EFR/EOO $4.00 $7.00

Processing Fees Member Non-Member

Cash Settlement $4.00 $7.00

Facilitation Fee $0.60

Give-Up Surcharge $0.05

Position Adjustment/Position Transfer $0.10

Cobalt Metal (Fastmarkets) Average Price Option (Commodity Code: COO)

Member Non-Member

CME Globex $4.00 $8.00

Block $9.00 $10.00

EFR/EOO $9.00 $10.00

Processing Fees Member Non-Member

Cash Settlement $9.00 $10.00

Facilitation Fee $0.60

Give-Up Surcharge $0.05

Position Adjustment/Position Transfer $0.10
8

Exhibit D

COMEX Rulebook

Chapter 5

 (“Trading Qualifications and Practices”)

COMEX Rule 588.H. – (“Globex Non-Reviewable Trading Ranges”) Table

(additions underscored)

Instrument Globex 

Symbol Globex Non-Reviewable Ranges (NRR)

Cobalt Metal (Fastmarkets) Average Price Option COO

The greater of the following:

•Delta multiplied by the underlying futures nonreviewable range

•20% of premium up to 1⁄4 of the underlying futures nonreviewable range

•5 ticks

Lithium Hydroxide CIF CJK (Fastmarkets) Average 

Price Option LHO

The greater of the following:

•Delta multiplied by the underlying futures nonreviewable range

•20% of premium up to 1⁄4 of the underlying futures nonreviewable range

•5 ticks
9

Exhibit E

COMEX Rulebook

Chapter 300

 (“Option Contracts”)

Rule 300.20.- Strike Price Listing and Exercise Procedure Table

Commodity 

Code 

CME 

Globex 

Code

Product 

Name

Product 

Group

Product 

Subgroup Exchange Rulebook Chapter

Strike Price 

Listing Rule

Option 

Style

Contrary 

Instructions

Margin 

Style

Exact At-TheMoney 

Characteristics

Underlying 

Commodity 

Code

Underlying 

Product 

Name

COO COO

Cobalt Metal 

(Fastmarkets) 

Average 

Price Option

Metals Battery COMEX 690

Minimum at-themoney strike at 

$0.25 per pound 

increment plus 

dynamic strikes at 

$0.25 per pound 

increment.

European

N/A -

Financially 

Settled

Equity

N/A -

Financially 

Settled

COB

Cobalt Metal 

(Fastmarkets) 

Futures

LHO LHO

Lithium 

Hydroxide 

CIF CJK 

(Fastmarkets) 

Average 

Price Option

Metals Battery COMEX 700

Minimum at-themoney strike at 

$0.25 per kilogram 

increment plus 

dynamic strikes at 

$0.25 per kilogram 

increment.

European

N/A -

Financially 

Settled

Equity

N/A -

Financially 

Settled

LTH

Lithium 

Hydroxide 

CIF CJK 

(Fastmarkets) 

Futures
10

Exhibit F

Cash Market Overview and Analysis of Deliverable Supply

CASH MARKET OVERVIEW

In its cash market and deliverable supply analysis, the Exchange has incorporated data from a range of 

sources as described below.

Fastmarkets (“FM”) is a leading global provider of price information for metals, agriculture and forestry 

products. FM’s assessment methodologies for the futures contracts are available on its website1(under 

product code MB-LI-0033 for lithium and MB-CO-0005 for cobalt). CME Group Inc. (parent company of 

COMEX) is a party to license agreements with FM to utilize its pricing data for final settlement of the 

contracts.

The United States Geological Survey (“USGS”) is a scientific public agency in the United States. It is 

tasked with studying the landscape of the United States, its natural resources, and the natural hazards that 

threaten it.

The UN Comtrade Database (“Comtrade”) provides free access to detailed global trade data. Comtrade

is a data repository of official trade statistics and relevant analytical tables. It contains annual trade statistics 

starting from 1962 and monthly trade statistics since 2010.

Final settlement of the underlying lithium futures contract is based on the monthly average of all price 

assessments for “Lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price cif China, 

Japan & Korea, $/kg” price assessment published by FM. The methodology refers to battery grade lithium 

hydroxide monohydrate delivered CIF in China, Japan or South Korea. The quantity required for 

assessment inclusion is 5 metric tonnes minimum. The denomination is $/kg. The assessment is published 

daily.

Final settlement of the underlying cobalt futures contract is based on the monthly average of all daily price 

assessments for FM “Cobalt standard grade, in-whs Rotterdam, $/lb.” The methodology refers to cobalt 

metal with a quality of minimum 99.8% cobalt metal content and matching the standard specifications of 

the following brands in original packaging: Katanga cathodes, Chambishi broken cathodes, CTT broken 

cathodes, Minara briquettes, Ambatovy briquettes, Norilsk grade 1 and grade 2 cut cathodes (production 

since January 2019), Sherritt, Vale Long Harbour standard grade. The quantity required for inclusion is 

minimum 1 metric tonne, maximum 100 metric tonnes and the location is in-warehouse, Rotterdam. The 

denomination is $/lb. The assessment is provided daily.

1 https://www.fastmarkets.com/methodology/metals/lithium

https://www.fastmarkets.com/methodology/metals/cobalt
11

CASH MARKET OVERVIEW - LITHIUM

Lithium is a metal that is widely used in industrial applications, notably in battery manufacturing. Lithium 

mining comes in two main forms: the metal can be produced from spodumene (lithium-containing rock) or 

brine. After extraction, lithium raw materials are refined into lithium carbonate or lithium hydroxide. 

According to the USGS, end-user markets for refined lithium were batteries (80%); ceramics and glass 

(7%); lubricating greases (4%); continuous casting mold flux powders (2%); air treatment (1%); medical 

(1%); and other uses (5%).

2 The global lithium industry is concentrated in Asia, which accounts for most 

of the global refining and battery manufacturing capacity. Major producing countries include Australia, Chile 

and China (Table 1). As a key material for lithium-ion batteries used in electric vehicles (EVs), market 

analysts expect that the global lithium industry will grow significantly over the coming decade(s) – FM stated 

that global lithium production must quadruple from 2020 to 2030 in order to meet growing demand.

3

Table 1 – Global Lithium Production (source: USGS4)

Metric tonnes contained 

lithium

2020 2021 2022 (estimate)

Argentina 5,900 5,970 6,200 

Australia 39,700 55,300 61,000 

Brazil 1,420 1,700 2,200 

Canada 0 0 500 

Chile 21,500 28,300 39,000 

China 13,300 14,000 19,000 

Portugal 348 900 600 

Zimbabwe 417 710 800 

Total (rounded) 82,500 107,000 130,000 

Table 2 shows that an average of 92,482 metric tonnes of lithium hydroxide was imported into North Asia 

during the past three years for which data is available.

2 https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-lithium.pdf

3 https://www.fastmarkets.com/article/3999803/lithium-supply-and-demand-to-2030

4 https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-lithium.pdf;

https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-lithium.pdf; please note that the USGS withheld production data for the United 

States to avoid disclosing company proprietary data
12

Table 2 – Lithium Hydroxide– imports into North Asia5

Imports - Metric 

tonnes

2020 2021 2022 Average 2020-

2022

China 527 3,600 3,088 2,405

Japan 37,339 33,876 35,543 35,586

Rep. of Korea 36,189 53,745 70,907 53,614

Total 74,054 91,221 109,538 91,605

Note: Japan import data for 2020 was not available and was assumed to be equal to 2019.

Lithium hydroxide is traded both in the spot and term markets. Term contracts are using fixed price or a 

“formula pricing,” meaning a floating price component that may include customs data and/or price 

indexation. Term contracts typically allow to freely re-trade contracted volume.

5

2020 data under 

https://wits.worldbank.org/trade/comtrade/en/country/ALL/year/2020/tradeflow/Imports/partner/WLD/product/282520, 2021 data 

under https://wits.worldbank.org/trade/comtrade/en/country/ALL/year/2021/tradeflow/Imports/partner/WLD/product/282520, 2022 

data under https://wits.worldbank.org/trade/comtrade/en/country/ALL/year/2022/tradeflow/Imports/partner/WLD/product/282520
13

CASH MARKET OVERVIEW - COBALT

Cobalt is a ferromagnetic metal found in the earth’s crust. It is typically mined as a by-product of copper 

and nickel mining operations. The Democratic Republic of Congo (DRC) is the world’s largest producer of 

cobalt. According to the USGS, it produced 68% of the global total in 2022. 

Table 1 – Global cobalt production (source: USGS6)

Mine production (metric tonnes) 2020 2021

2022 

(estimate)

United States 600 650 800 

Australia 5,630 5,295 5,900 

Canada 3,690 4,361 3,900 

China 2,200 2,200 2,200 

Congo (Kinshasa) 98,000 119,000 130,000 

Cuba 3,800 4,000 3,800 

Indonesia 1,100 2,700 10,000 

Madagascar 850 2,800 3,000 

Morocco 2,300 2,300 2,300 

Papua New Guinea 2,940 2,953 3,000 

Philippines 4,500 3,600 3,800 

Russia 9,000 8,000 8,900 

Turkey - 2,400 2,700 

Other Countries 7,640 4,567 5,200 

World Total (rounded) 142,000 165,000 190,000 

Cobalt is used in many applications, among which are: use of cobalt in alloys (for aerospace, gas turbines, 

medical equipment, etc.), lithium-ion batteries, various electronics (integrated circuits, semi-conductors) 

and catalysts. Since cobalt is a key component in battery manufacturing, it is expected that growth in electric 

vehicle usage will translate into increased demand for cobalt in the coming years.

The cobalt brands currently allowed in the FM assessment are mined and refined in the following regions 

and by the following firms:

Table 2 – Cobalt brands used in assessment (source: Fastmarkets)

Name Location Ownership

Katanga cathodes Katanga Province, DRC Katanga Mining/ Glencore

Chambishi broken cathodes Kitwe, Zambia Eurasian Resources Group 

CTT broken cathodes Bou-Azzer mine, Morocco Managem Group 

Minara briquettes Perth, Australia Glencore

Ambatovy briquettes Moramanga, Madagascar Sumitomo

Norilsk grade 1 and 2 cut cathodes Norilsk, Russia Nornickel

Sherritt Briquettes Cuba/Canada7 Sherritt Corporation

6

https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-cobalt.pdf, https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-cobalt.pdf

7 Sherritt briquettes are refined in Alberta province, Canada, from material mined and processed in Moa, Cuba.
14

Vale Long Harbour standard grade Long Harbour, Canada Vale

Based on publicly available annual reports, the Exchange determined annual production volume for the 

locations producing the assessed brands as follows. Overall, the locations account for about 1/5 of global 

cobalt production.

Table 3 – Production volumes of assessed brands (source: company reports)

Production ('000 MT) 2020 2021 2022 2020-2022 average

Katanga cathodes 23.9 23.8 25.5 24.4

Chambishi broken cathodes* 3.4 3.4 3.4 3.4

CTT broken cathodes** 2.4 1.8 1.8 2.0

Minara briquettes 2.9 2.5 3.0 2.8

Ambatovy briquettes*** 2.8 2.8 2.8 2.8

Norilsk grade 1 and grade 2 cut cathodes  6.0 5.0 5.0 5.3

Sherritt 3.4 3.5 3.4 3.4

Vale ** *** 2.5 2.5 2.4 2.5

Total 47.3 45.3 47.3 46.6

Notes: 

* Production data for Chambishi was not available. The Chambishi refinery has an annual capacity of 6,800 tonnes/ year. We assumed 

that it was producing at 50% of capacity.

** 2022 data for CTT not available, assumed same production as prior year

*** Production data for Ambatovy was not available. The Ambatovy refinery has an annual capacity of 5,600 tonnes/ year. We assumed 

that it was producing at 50% of capacity. 

  2022 data for Norilsk not available, assumed same production as prior year

** *** Vale does not break down production by standard grade/ alloy grade. We assumed a 50% is standard grade

For links to company reports see appendix below. 

Physical trade in cobalt takes place throughout a complex supply chain involving producers, refiners, 

merchants, and end-users. Cobalt is traded in the spot market as well as using floating index prices or on 

a fixed price basis for term contracts. Term contracts typically allow to freely re-trade contracted volume.

The growth in electric vehicle manufacturing has led to higher demand for cobalt sulfate, the cobalt 

intermediate product used in lithium-ion batteries. Cobalt sulfate can be manufactured from cobalt metal 

but is typically refined directly from cobalt intermediate products such as cobalt hydroxide. Since cobalt 

metal is consumed in traditional industrial applications and can also find its way in lithium-ion batteries via 

chemical conversion, it serves as the benchmark price in both sectors. Intermediate products in the cobalt 

supply chain are priced with reference to the price of cobalt metal on a “percent payable basis.” 
15

ANALYSIS OF DELIVERABLE SUPPLY

Appendix C to part 38 of the Commission’s regulations defines deliverable supply as “the quantity of the 

commodity meeting the contract’s delivery specifications that can reasonably be expected to be readily 

available to short traders and saleable by long traders at its market value in normal cash marketing channels 

at the derivative contract’s delivery points during the specified delivery period, barring abnormal movement 

in interstate commerce.”

The Exchange is assessing spot month position limits for the lithium contract based on Comtrade import 

data for lithium hydroxide into China, Japan and Republic of Korea. Average annual import volume into the 

three countries represents 91,605 metric tonnes (MT) annually for the 2020-2022 period, equivalent to 

7,634 MT per month (7,634 contracts equivalent). The Exchange proposes a spot month position limit of 

400 contracts, equivalent to 5.2% of deliverable supply.

The Exchange is assessing spot month limits for the cobalt contract based on production data for the mines 

whose brands are eligible for inclusion in the underlying FM market assessment. Deliverable supply is 

defined as the average annual production volumes of 46,600 MT, equivalent to 3,900 MT per month (3,900 

contracts equivalent per month). The Exchange proposes a spot month position limit of 800 contracts, 

equivalent to 20.50% of deliverable supply.

Appendix – company reports for production volumes

Glencore

https://www.glencore.com/dam/jcr:e43e5f94-6484-4332-9f09-e3601aafb44f/GLEN_2022-FY_ProductionReport.pdf

https://www.glencore.com/dam/jcr:90d4d8f9-a85e-42ec-ad8a-b75b657f55d2/GLEN_2021-fullyear_ProductionReport.pdf

Chambishi

https://www.ergafrica.com/cobalt-copper-division/chambishi-metals/

CTT

https://managemgroup.com/files/2022-04/RFA%20MANAGEM%202021_0.pdf

Ambatovy

https://ambatovy.com/en/operations/operations-components/

Norilsk

https://www.nornickel.com/upload/iblock/1cc/sju417vvrpj0kytcmkfllm0eu87rgtmx/NN_AR_2021_Book_ENG_26.09.22

.pdf

https://www.nornickel.com/upload/iblock/305/2020_annual_report_of_nornickel.pdf

Sherritt

https://www.sherritt.com/English/Investor-Relations/News-Releases/News-Release-Details/2023/Sherritt-Reports-Strong-2022-

Production-Results-and-Provides-2023-Guidance/default.aspx

https://www.sherritt.com/English/Investor-Relations/News-Releases/News-Release-Details/2022/Sherritt-Ends-2021-With-StrongProduction-Results-and-a-Favourable-Outlook-for-Nickel-and-Cobalt-Markets/

Vale

https://www.vale.com/4q22-sales-and-production-report/-/categories/64940

https://docs.publicnow.com/88995A9F8507E52056789EAD0DD420A0C9CE03AE