Welcome To the Stock Synergy, Momentum & Breakout HUB On AGORACOM
Edit this title from the Fast Facts Section
Message: traders blip on cobalt
| Cobalt prices hit one-year peaks, tightness seen for low-grade |
|
By Martin Hayes |
|
London, 05 November 2009 - Cobalt prices continued to rise in Europe this week, hitting their highest levels since last November, as tightening availability of 99.30 percent metal lifted the prices for all grades above $20. "It [availability] is quite tight on the ground and there is a bit of a squeeze for Russian," one trader said. High-grade 99.8 percent metal was quoted at $21.00/22.50 per pound, up around $1.50 from last week's levels, while 99.3 percent Russian metal stood at $20.00/21.00, up around $2 and its highest since November 2008. End-user business has picked up after a fallow start to the usually key final quarter of the year, entailing a scramble to secure supplies ahead of the year-end holiday period. There is also some buying ahead of the launch of cobalt futures on the London Metal Exchange early next year, traders said - 99.30 percent is the deliverable grade. The LME will introduce its cobalt futures contract in February and one producer, Vale, has already listed its cobalt for delivery, with more expected by the end of the year. Russia's Norilsk, the producer of 99.30 percent cobalt, is said to be in the process of getting approval. This focus on securing lower-grade metal has seen a backwardation spring up in the market as well of some $0.50-1.00 per pound for a spot-to-three-months period, another trader said. "That is the chip that everyone wants," he said. But it is unlikely that significant tonnages of metal are being stockpiled now because cobalt is expensive to finance and first deliveries will not be until three months after the contract launch - in May 2010. "We are probably seeing a bit of this now but this is more likely in January," the first trader said. Even before debuting as a fully fledged futures market, cobalt has built up a reputation as a fast-moving metal that can rival its major base metals peers, such as copper, for peak-to-trough volatility. Prices have displayed this over the past year amid high volatility. They reached five-year lows of $9 per pound for 99.30 material and $10 for 99.80 metal at the start of December last year, tumbling after hitting 30-year peaks and near-record highs of more than $50 per pound in May. |
Loading...
Loading...
New Message
Please
login
to post a reply