Cobalt falls to 13-month low on end-of-month pressure, limited demand

Low-grade cobalt dropped to its lowest level since January 2014 this week, as pressure to offload at the end of the month met with limited spot demand.

Low-grade cobalt dropped to its lowest level since January 2014 this week, as pressure to offload at the end of the month met with limited spot demand.

Low-grade cobalt slid to $13.10-14.15 per lb on Friday February 27, from $13.20-14.25 per lb on Wednesday February 25.

This was the lowest low-grade low since January 31, 2014, when the range was $13-14.20.

Business was reported as low as $13.10 on low-grade, as pressure to offload in Japan grew.

High-grade prices stabilised at $13.50-14.30, after dropping earlier in the week.

High-grade business was transacted at around and $13.75 and $13.80.

Talk of end-of-month pressure was rife, particularly in Japan, where the end of the new fiscal year also looms.

This led some to reduce stocks, and prompted buyers to push for lower numbers.

“We had to sell by the end of the month,” one seller, who had completed business at lower prices than a week earlier, told Metal Bulletin.

“We also think it will be softer next week, as the Japanese end of the new fiscal year is coming up,” the source added. “There seems to be a lot of competition.”

A lack of buying has put pressure on prices during the first two months of the year, surprising many in the market who had stocked up ahead of expected strong consumer demand in 2015.

“There was an absence of buying. Producers had been holding back, and now they’re releasing tonnage, and traders are sellers, so it’s looking weaker in the short-term,” a trader said.

“There is definitely a drift down in price,” a producer said.

The source argued, however, that the recent extent of the published price falls did not reflect fundamentals.

“The speed of the price falls is too quick. Nothing changed in the past two weeks,” he said.

READ ON: Cobalt may be languishing in the low teens, but with expectations of price hikes in the long-term, Metal Bulletin considers if, and when, we’ll see a real price surge

Fleur Ritzema 
fritzema@metalbulletin.com
Twitter: FleurRitzema_MB 

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