Metal Bulletin and London Metal Exchange (LME) cobalt prices soared to multi-month highs this week, on an absence of producer offers and strong demand.

Reaching its highest level since late September 2013, Metal Bulletin’s low-grade cobalt price hit a nineteen-week high of $13.20-14.40 per lb on Wednesday February 5, up from $13-14.20 per lb on Friday January 31.

High-grade cobalt prices reached $13.95-14.75, up from $13.65-14.50 per lb previously.

And while off-exchange prices showed considerable strength, LME cobalt was even stronger, trading at more than a $1 per lb premium to the MB low-grade-low.

The LME official cash cobalt contract reached $30,750/31,750 per tonne ($13.95/14.40 per lb) on Wednesday, the highest official price since July 2013.

The whole complex has been lifted by a reduction in producer availability and heightened demand from consumers and traders. Traded volumes have been strong in recent weeks.

“We’re very tight so we’re not really offering. The trade is looking to buy and is willing to pay above $14,” a producer said.

“I spoke to a couple of customers yesterday, who are receiving only offers over $14. Interest still seems strong, despite the Chinese being on holiday,” a second producer said.

“We had quite a few offers, but I get the feeling that producers would only be offering small quantities. If you want more, I don’t think you’d find it easily,” a consumer, who had secured high-grade material, said.

Several traders were looking to pick up tonnages this week, with some noting an absence of available material.

Some were able to secure material at the lower end of the complex, however.

But sources noted that while producer availability is constrained, traders are sitting on large stocks, which, if released, could dampen the recent rally.

“As we all have material, traders have not been hesitant to sell, but nor are they hesitant to raise their prices. We don’t really need to buy as we have plenty of stocks,” the trader added.

Most saw further price upside ahead, however.

“I think the rally has at least this month,” he added.

Click here to view the trades reported during Wednesday's pricing session.

Fleur Ritzema
fritzema@metalbulletin.com
Twitter: FleurRitzema_MB