Cobalt prices under pressure in well-supplied spot market

Standard and alloy-grade cobalt prices fell by 2.8% in the week ended Friday January 4. The standard-grade price was assessed at $25.75-27.25 per lb and the alloy-grade price at $25.50-27.25 per lb, both in-warehouse, on Friday.

Prices were steady midweek while the market waited for spot inquiries after the end of the holiday period, but buying interest in the second half of the week attracted competitive offers, in the same way it had done before the Christmas break.

“The whole market is under pressure… The cheaper offers are hitting home,” a trader said.

“People tell me they can offer [at prices] below the [standard-grade] low, and that seems to make sense to me,” a consumer said.

The majority of market participants spoken to by Fastmarkets expect cobalt prices to fall further over the coming weeks, with metal easier to secure than it has been over the past few years, and some consumers in the battery sector preferring to use readily-available sulfate.

“There is still stock. People are aware of the risks or the dangers [of holding material] and the smaller or medium-sized traders want to liquidate,” a distributor said.

Other sources agreed that, for the time being, the available units lie with traders.

“The producer liquidation is supposedly over,” a second trader said.

“We heard that stockpiles are lower now. People needed to sell by the end of December but, come January, that pressure has subsided,” a second distributor said.

With further price falls expected to come, market sources thank that spot activity will remain limited in the coming weeks, with buyers preferring to declare optionality on their long-term contracts.

Annual contracts have typically been agreed for 2019 on the basis of the average of the previous month’s standard-grade low, with a discount, meaning that contractual prices are more appealing than prevailing spot prices.

“December was [very] quiet from a demand point of view, but people have taken their maximums for January,” the second trader said.

“People want their material this week, which tells me the consumption is okay – and volumes are toward the upper end of call-offs,” a final distributor said.

Fastmarkets changed the names of its benchmark in-warehouse Rotterdam cobalt price assessments on January 2, 2019. The name “standard-grade” has replaced the name “low-grade.” The name “alloy-grade” has replaced the name “high-grade.” Click here for further details about the name changes and consultation process.