We are delighted to have been selected by the LME as its partner to develop the pricing benchmarks for the lithium market. The decision was made following a competitive tender process that started early in 2018.
We are the provider of industry benchmarks across several critical commodities including aluminium premiums, cobalt, ferro-chrome, pulp, lumber and high-grade iron ore. The experience and in-house expertise of our 400-strong global team in 14 international offices enables us to serve our markets by co-operating with the companies that rely on our benchmark prices around the world and across the entire supply chain.
The lithium industry is going through a period of rapid evolution and volatility - as the provider of a critical component in one of the key technologies of the 21st century, it requires strong and representative price benchmarks to value trade, contracts, risks and opportunities.
Price reporting agencies (PRAs) that provide price benchmarks carry a high level of responsibility through ensuring rigor in their processes as well as an assurance to the markets that their internal processes and systems comply with their publicly available and documented methodologies against which the price discovery process is undertaken.
Fastmarkets aligns all its prices to the highest industry standards for compliance set out by IOSCO. Our lithium price has also been subject to a successful external IOSCO audit carried out by PwC.
We certainly respect and value the essential role played by all PRAs in contributing transparency to markets that would otherwise be opaque. The transparency that PRAs provide allows markets to operate efficiently through providing counter parties with a benchmark-based pricing mechanism that facilitates long-term trading arrangements.
To provide this transparency in a robust and auditable way, we have invested in state-of-the-art pricing systems, legal and compliance infrastructure and new products that ensure the reliable and rapid dissemination of representative market data for the markets we serve.
When we tendered to partner with the LME to develop a financial benchmark alongside our physical benchmark for lithium, it was a fair, sound and competitive process involving several other PRAs.
We welcomed the opportunity to showcase our capabilities through the process with the LME. This involved close analysis of our people, systems and processes over what was an almost year-long consultation.
We are proud that the LME selected Fastmarkets as its partner based on the feedback it heard and the involvement of the major participants across the global lithium supply chain.
We will continue to work hard with companies in this critical global market to supply the robust benchmarks that they require.