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SMM Defends Price Assessment Methodology Amid False Information Claims
SMM Information & Technology Co., Ltd., a leading spot market price reporting agency, has issued a formal statement addressing what it describes as false information circulating about its price assessment practices in the lithium carbonate market.
The company states that recent claims suggesting its price assessments “consistently and significantly deviate from fair value and futures prices” are unfounded and potentially harmful to market transparency. According to SMM, these allegations began appearing during a sensitive period when the Guangzhou Futures Exchange was implementing risk control measures for lithium carbonate futures contracts.
Market experts note that the relationship between spot and futures prices is often misunderstood by casual observers. Spot prices reflect immediate supply-demand conditions and deliverable transaction terms, while futures prices incorporate market expectations, capital costs, and carrying expenses. Economic theory establishes that these prices typically converge as contract expiration approaches—a principle known as “convergence at maturity.”
“The difference between spot and futures prices, especially for far-month contracts, is entirely normal within market pricing mechanisms,” explained a commodities analyst familiar with the situation. “Comparing specific periods’ futures prices with spot assessments and concluding there’s a consistent deviation shows a fundamental misunderstanding of market dynamics.”
To counter these allegations, SMM has released data analysis showing that from September 2023 to 2025, the price spread between SMM’s battery-grade lithium carbonate assessments and corresponding GFEX lithium carbonate futures contract prices fluctuated within reasonable ranges. The company emphasized that this spread consistently narrowed as contracts approached expiration, aligning with established market patterns.
The timing of the false information’s appearance coincided with the Guangzhou Futures Exchange implementing several risk control measures between November and December 2025. These measures included adjustments to transaction fee standards and trading limits, actions the exchange characterized as routine risk management for market stability.
SMM suggests the deliberate circulation of misinformation appears designed to pressure the company’s neutral assessment process, potentially disrupting the normal relationship between futures and spot prices in the lithium market—a critical component for battery manufacturing and electric vehicle production.
The company emphasized its commitment to compliance and neutrality in its assessment methodology. “SMM follows the International Organization of Securities Commissions’ ‘Principles for Financial Benchmarks’ and undergoes independent third-party audits,” the statement noted. Their internal governance includes comprehensive firewall systems ensuring personnel involved in price assessments hold no related futures or spot positions.
Industry observers point out that price reporting agencies like SMM play a crucial role in providing transparency to specialized commodity markets. Their assessments often serve as benchmarks for physical trading contracts and as settlement mechanisms for derivatives, making their independence particularly important.
SMM has initiated legal proceedings against those it accuses of spreading false information and is “comprehensively and continuously collecting evidence related to the infringements.” The company stated it will pursue all legal avenues, including reporting to regulatory authorities and filing complaints with online platforms where the alleged misinformation appeared.
The controversy highlights the growing importance of lithium markets as the electric vehicle industry expands globally. With lithium prices experiencing significant volatility in recent years, reliable price benchmarks have become increasingly important for manufacturers, traders, and investors throughout the supply chain.
SMM concluded its statement by urging market participants to enhance their legal awareness and professional judgment, obtain information from authoritative sources, and resist spreading unverified claims that could undermine market integrity.
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11 Comments
Glad to see SMM taking legal action against these false claims. Proper price assessment methodologies are crucial for market transparency. It’s important to understand the differences between spot and futures prices.
Absolutely. Spot and futures prices serve different functions and shouldn’t be directly compared out of context.
It’s concerning to see false claims circulating about lithium carbonate pricing. SMM is right to take decisive action to uphold transparency and trust.
Legal action may seem aggressive, but protecting price assessment integrity is critical, especially for strategic commodities like lithium. Transparency builds trust in the market.
Agreed. Credible price reporting is essential infrastructure for these fast-moving, high-stakes commodity markets.
The distinction between spot and futures prices is nuanced but important. Glad to see SMM taking a proactive stance to defend their methodologies and market role.
Interesting to see the exchange implementing risk controls for lithium carbonate futures. This suggests heightened market volatility and the need for robust price discovery mechanisms.
Good point. Regulators have to balance market efficiency with managing risks, which isn’t always straightforward.
I appreciate SMM’s efforts to clarify the pricing dynamics at play. Oversimplifying the relationship between spot and futures can lead to misinformation. Fact-based analysis is important.
Curious to see how this legal case unfolds. Accurate price discovery is so vital for efficient commodity trading and investment decisions.
Absolutely. Reliable price signals are the lifeblood of well-functioning commodity markets.