The Guangzhou Futures Exchange is planning to list lithium hydroxide futures contracts as soon as this year, according to people familiar with the matter. The Chinese bourse is preparing physically-settled contracts for the battery material to improve pricing transparency and offer a risk-hedging tool. The timeline depends on regulatory approval.

GFEX did not respond to requests for comment. The exchange already listed lithium carbonate contracts in 2023, which have become popular. China aims to boost influence over critical raw material prices.

Lithium hydroxide, used in high-nickel batteries, has a shorter shelf life, requiring careful warehousing. China became a net importer earlier this year. Producers including Ganfeng Lithium Group Co., Tianqi Lithium Corp., Chengxin Lithium Group Co., Jinzhou Yongshan Lithium Co., and Sichuan Yahua Industrial Group Co. have applied to be delivery depots.

The exchange’s lithium carbonate contracts have been highly volatile, prompting repeated interventions.