PRICING NOTICE: Proposal to amend cobalt hydroxide payable assessment, index specifications

Following an initial discussion with market participants, Fastmarkets is proposing to tighten the chemical specifications of the cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low end) and the cobalt hydroxide index 30% Co min, cif China, $/Ib by adding a maximum iron content of 3%.

Market participants recently reported emergence of some high iron cobalt hydroxide in the market. While the majority consumers are able to take such material, it is likely to attract a discount due to the additional costs incurred to remove extra impurities.

Fastmarkets’ specifications are intended to be wide enough so as to incorporate as much spot market activity as possible, while also being narrow enough so as to reflect a mainstream, tradable range that reflects changing market trends and captures price moves.

In light of the above, Fastmarkets is planning to add an additional requirement on iron content to the existing chemical specifications of its two cobalt hydroxide prices.

The proposed amended specifications are as follows, with changes highlighted in italics:

MB-CO-0021: Cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low end)
Quality: Units produced from large-scale mining activity, with the following chemical composition: Co 30% min, Mn 6.5% max, Mg 6.5% max, S 5% max; Cd 100ppm max; Fe: 3% max; limited concentration of natural radioactivity: GB20664-2006 (suitable for customs clearance into China).
Quantity: Min 50 tonnes (cobalt content)
Location: cif China (other terms normalized)
Timing: 45 days
Unit: % payable of Fastmarkets’ standard-grade cobalt price (low end, $ per lb)
Payment terms: Letter of credit at sight, current and following price month (‘M’ and ‘M+1’)
Publication: Twice weekly, Wednesday and Friday, 3pm London time
Notes: Where the publication day falls on a public holiday in England and Wales, the assessment will be rolled over from previous pricing session.

MB-CO-0020: Cobalt hydroxide index 30% Co min, cif China, $/Ib
Quality: Units produced from large-scale mining activity, with the following chemical composition: Co 30% min, Mn 6.5% max, Mg 6.5% max, S 5% max; Cd 100ppm max; Fe: 3% max; limited concentration of natural radioactivity: GB20664-2006 (suitable for customs clearance into China).
Quantity: Min 50 tonnes (cobalt content)
Location: cif China (other terms normalized)
Timing: 45 days
Unit: $/lb
Payment terms: Letter of credit at sight, current price month (‘M’)
Publication time: 5pm London time, last working day of the month.

The consultation period for this proposed amendment starts from Tuesday June 2 and will end on Tuesday June 30. The amendment will take place, subject to market feedback, on Thursday July 2.

All historical data relating to the assessment prior to the amendment will remain available in the pricing section of the Fastmarkets website.

To provide feedback on the cobalt hydroxide price assessments, or if you would like to provide price information by becoming a data submitter, please contact Charlotte Radford and Susan Zou by email at: pricing@fastmarkets.com. Please add the subject heading ‘FAO: Charlotte Radford/Susan Zou re: cobalt hydroxide price assessments.’

To see all Fastmarkets’ pricing methodology and specification documents, go to https://www.fastmarkets.com/about-us/methodology.

[Editor’s note: This article was updated on June 3 to clarify the consultation period for this proposed amendment.]