Two via OilPrice. First up, the headline story from Ag Metal Miner:
The CME’s Comex and London Metal Exchange (LME) are squaring up for the industrial revolution that is electrification, according to recent posts by Bloomberg and the Financial Times.
Both exchanges are busy developing and, more importantly, marketing products that cater to industry’s need to hedge exposure to forward prices for key battery ingredients. Whether for car batteries, electronic goods or power grid storage, the key metals are demanded by a common technology: lithium-ion batteries.
Futures exchanges launch lithium hydroxide contracts
Both exchanges have launched identical lithium hydroxide cash settled contracts based on the Fastmarkets prices for China, Japan and South Korea – the key battery-producing regions.
So far, volumes are light. But with lithium hydroxide prices up some 86% this year, the market is arguably crying out for a hedging mechanism.
Initially, miners were said to be reluctant to support such a product, preferring long-term mine-to-consumer contracts. The same is the case for aluminum.
Eventually, the industry came round.
The LME is reported by the FT to have included industry leaders like Albemarle and Tesla in the design and development of the product to ensure its acceptability.
LME cobalt retrospective
The LME certainly has unhappy memories in this respect.
Its launched a physically delivered cobalt contract way back in 2010. The contract initially gathered supporters, but worries about the ethical credentials of some of the deliverable brands hit uptake. The exchange then had to relaunch a cash-settled contract in 2019, yet uptake remained poor.
On this one, the CME could be said to be eating the LME’s lunch.
Since its December launch, the COMEX cobalt contract has enjoyed a steady rise in uptake, in part due to aggressive marketing.....
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And a bit further up the value chain, the rentiers, Wall Street product packagers and the subsidy seekers are mobilizing:
VC Firms Are Pouring Billions Of Dollars Into Green Tech
ESG investing: it's in every media outlet and on every bank's business plan. A rush to what many call alignment of values with investment goals has led to a flourishing new industry with funds popping up like mushrooms after the rain. Green-tech startups are the new dotcoms, it seems, and the danger of a bubble seems distant—for now.
Interestingly enough, things were very different just a few years ago, as the Wall Street Journal's Scott Patterson noted in a recent article. The past decade, he wrote, saw a pullout of investors from the green energy technology field after a couple of notable demises—one of solar company Solyndra back in 2011 and one of battery maker A123 Systems a year later.
From today's standpoint, this is ancient history. Now, hardly a week goes by without a breakthrough of some sort in batteries, solar power tech, or, say, hydrogen. Most of these breakthroughs have to do with cost and efficiency, which are the two things that can guarantee a product a long life. Yet, most of these breakthroughs never make it to the consumer. They never make the leap across the so-called valley of death between the lab and the market. Especially if funding is scarce and hard to come by.
Venture capital funds are changing this, the WSJ's Patterson writes, citing data from PitchBook, a private capital market research provider. According to PitchBook, venture capital funds are seen completing $7.7 billion worth of green tech deals this year, which would be up from $1 billion ten years ago.
It's not just venture capitalists, either. JP Morgan earlier this month launched not one but three new sustainability investment funds. This was only the latest move in a rush to set up clean energy investment funds to take advantage of growing investor appetite for environmental, social, and governance, commonly known as ESG, investing....
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One thing to be aware of, as Mr. Patterson knows, having covered it for the Journal, is that the V.C.'s, in aggregate lost money on the last green go-round. They are going to leave the utility-type returns and moonshots to Bill Gates and, in a few years the private equity vultures will pick over the bones.
