CME Group, the world’s largest derivatives exchange, is considering a possibility of launching a new futures contract for rare earth elements, sources familiar with the matter told Reuters.
The company is working on a new futures contract combining the two most important rare earths, neodymium and praseodymium (NdPr), sources said. The move comes as the Western nations are becoming increasingly concerned about China’s de-facto monopoly in the rare earths sector.
The two elements are considered the major "building blocks" for the green economy and are used to manufacture permanent magnets for electric vehicles, wind turbines, and many other products.
"It's such a key missing piece of the puzzle for the industry right now," one of the sources said, as reported by Reuters.
No final decision has been taken regarding any launch. So far, the volume of rare earths futures market is relatively low compared to other metals. China has two exchanges for the spot trading of rare earths - Ganzhou Rare Metal Exchange and Baotou Rare Earth Products Exchange.
Theodor Lisovoy, Managing Editor, Rough&Polished
