COBALT FUTURES SNAPSHOT: First trade concluded for 2023, open interest grows

The latest analysis from recent activity on the CME Group’s cobalt metal futures contract, cash-settled against Fastmarkets’ price assessment for cobalt, standard grade, in-whs Rotterdam.

Key trades
June 2, 2021: 120 tonnes (10 tonnes each month from January to December 2022, all at $21.45 per lb)

June 17, 2021: 240 tonnes (10 tonnes each month from January to December 2022, all at $22.95 per lb; 10 tonnes each month from January to December 2023, all at $24.15 per lb)

As of June 16, the contract had 1,110 open interests out to December 2023, compared with 915 tonnes on May 12.

Key drivers

  • Cobalt price started to rebound in mid-June with recovering spot buying appetites, while traders have become aggressive in the market after sensing a return of demand.
  • Prior to that, the blue metal’s price was rangebound at $19.80-20.60 per lb between mid-May and mid-June.
  • Chinese market participants were still mostly holding back from the international markets, although the downstream cobalt sulfate market has shown a slight turnaround.
  • Fastmarkets’ price assessment for cobalt, standard grade, in-whs Rotterdam, was $20.20-20.95 per lb on June 17, up from $20.00-20.65 on June 15. But the price was still down by 19.45% from $25.30-25.80 per lb on March 9, when the price was at a two-year high.

Key quotes
“We are very excited to see the activity in the cobalt futures market expand on a forward basis, with [2022] posting more open interest and [2023] seeing its first trade, which SCB was thrilled to broker on June 17. This growing interest from participants to mitigate price volatility outside of spot months, especially in thriving sectors such as the electric vehicle industry, confirms the importance of having an active financial futures contract that covers several years forward” - Robin Tisserand, battery raw materials broker, SCB Brokers

“Obviously, expectations for the cobalt price are increasing year-on-year, and that’s why we see a steady contango on the cobalt contract” - cobalt metal trader

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