Foreign power reported on March 6 that the London Metal Exchange (LME) does not plan to launch a separate market because the market size is not large enough"Green"nickel contract, but said its partners are working on an index that reflects demand for low-carbon nickel**.
There is growing demand from high-cost producers such as Australia that nickel prices reflect strict environmental and governance standards. Low nickel prices in Australia have forced miners to close their operations, most of which are produced with coal, due to the massive influx of nickel from Indonesia.
In a statement, the London Metal Exchange said: "Market participants have expressed concern that there is still significant debate in the market over how to define 'green'.
In addition, the LME contract represents a narrow market segment that will not be able to attract sufficient inventory and trading volume. ”
LME believes that there is limited contract interest in certain segments of the nickel market, namely so-called secondary materials such as nickel sulphate, matte nickel and others. Its nickel contract, the so-called Grade 1 Refined Nickel, is 998% and above.
Last week, Australian mining giant Andrew Forrest, chairman of Fortescue, said the LME should classify its nickel contracts into "clean" and "dirty" categories to give customers more choice.
Australia's Minister for Resources, Madeleine King, who visited Canada this week, said in a joint statement that Canada joined Australia this week in calling for strong ESG credentials to be established in the global ** chain of critical minerals.
Green specs
While the market is not yet liquid enough to accommodate the green premium, Metalshub has set out to build an index that reflects consumer demand for green nickel**.
According to the London Metal Exchange, low-carbon nickel means that no more than 20 tonnes of carbon dioxide equivalent is required to produce one tonne of nickel. Currently, carbon footprints range from 6 tonnes to more than 100 tonnes of CO2e per tonne of LME nickel.
Users of the Metalshub platform include Outokumpu and Aperam, and any Class 1 nickel on the platform can list specific ESG certificates, including its carbon footprint, allowing buyers to filter carbon intensity.
Metalshub managing director Frank Jackel told Reuters"This functionality is currently in place, and there is no need to split the LME contract to evaluate'Green'Premium. "
The London Metal Exchange said that from this month, Metalshub will begin reporting monthly data including low-carbon nickel trading.
The London Metal Exchange said it plans to release a low-carbon index** as trading volume increases, which could eventually develop into a "green" nickel premium index that reflects more sustainability metrics.
"CO2 emissions and ESG performance will play an important role, and if the market is willing to pay, it will provide producers with the opportunity to sell their products at a premium," Jackel said in an email. He added that Metalshub is keen to work with Australian miners.