(Reuters) - Albemarle (NYSE:ALB), the world\'s largest producer of lithium for electric vehicle batteries, said on Wednesday that it will hold several auctions to sell supplies of the metal as part of a push to boost market transparency.
Lithium has historically been sold on long-term contracts by Albemarle and other producers, making it difficult for automakers and other customers to determine a benchmark price.
The slowing pace of EV adoption globally, combined with lithium overproduction in China, has dragged down lithium prices and seen job cuts by producers. A basket of lithium prices compiled by Benchmark Mineral Intelligence has dropped 80% in the past year.
While the CME Group (NASDAQ:CME) has in recent years started to trade lithium, volumes on those contracts are dwarfed by contracts for copper and other critical minerals.
Working with London Metal Exchange partner Metalshub, Albemarle said it plans to hold several auctions for lithium supplies to allow potential customers \"to state what they consider the appropriate price.\"
The first auction is planned for March 26.
\"Our emphasis is on promoting price transparency,\" said an Albemarle spokesperson.
\"We see this as a responsible approach to price discovery that can lead to fair product valuation - for both buyers and sellers - and drive towards a more robust, sustainable market.\"
As part of the first auction, Albemarle plans to offer 10,000 metric tons of chemical-grade spodumene concentrate, which is made from the company\'s hard rock mines in Australia.
The March 26 auction will be in English and Mandarin and will use the Chinese Yuan as currency. The bids will be confidential.
The Charlotte, North Carolina-based company had moved to cut costs in January amid falling prices for lithium.