LONDON (Reuters) - The London Metal Exchange is planning to create a committee to represent the interests of producers and users of lithium, a key component in electric car batteries, it said on Tuesday.
Announcing the committee during LME Week, an annual gathering in London of metals consumers, producers, traders and brokers from around the world, the LME said it was likely to include representatives of nine companies.
These include vehicle makers Tesla and Jaguar Land Rover, and lithium producers and processors Tianqi Lithium Australia, BASF and Chile-focused Albemarle, the LME said.
Demand for lithium is expected to more than triple by 2025 to 917,469 tonnes as production of electric vehicles grows, according to Canaccord Genuity.
But near-term oversupply has more than halved prices since the start of 2018, prompting major producers to scale back expansion plans.
The LME is planning a lithium contract, and in June selected Fastmarkets to provide a reference price, but has given no timeline for an official launch.
However, Albemarle, the biggest producer, has said it will not participate in the contract, depriving it of a key source of pricing data.
Its move reflects a view by some that lithium is a specialty chemical rather than a basic commodity and should be priced on a contract-by-contract basis.
The LME has committees, which perform an advisory role, for producers and users of other metals that trade on the exchange including copper, aluminum and cobalt.
The exchange is owned by Hong Kong Exchanges and Clearing Ltd.
Reporting by Peter Hobson; Editing by Mark Potter and Jan Harvey