COBALT FUTURES SNAPSHOT: Over 1,000 tonnes traded in June

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 21, 2021: 120 tonnes (5 tonnes each month from January to December 2022, all at $23 per lb; 5 tonnes each month from January to December 2023, all at $24.25 per lb)

June 24, 2021: 60 tonnes (5 tonnes each month from January to December 2023, all at $25 per lb)

June 25, 2021: 444 tonnes (187 tonnes for July 2021 at $22.1 per lb, 187 tonnes for November 2021 at $22.6 per lb, another 70 tonnes also for November 2021 at $22.6 per lb)

June 30, 2021: 240 tonnes (5 tonnes each month from January to December 2022, all at $25 per lb; 5 tonnes each month from January to December 2022, all at $25.25 per lb; 5 tonnes each month from January to December 2023, all at $26 per lb; 5 tonnes each month from January to December 2023, all at $26.25 per lb)

Activity was busier in late June compared with the first half of the month, mirroring the physical market. 

As of July 8, there were 1,745 open interest futures contracts out to December 2023, compared with 1,110 tonnes on June 16.

Key drivers

  • The cobalt metal price rally has accelerated since late June amid tight availability and robust end-user demand. As of July 8, the blue metal price has risen for 17 consecutive sessions.
  • Fastmarkets’ price assessment for cobalt, standard grade, in-whs Rotterdam, was $24-24.95 per lb on July 8, up by 1.2% from $23.85-24.5 per lb in the prior day. The blue metal price has risen by nearly 21% since the beginning of June.
  • The firm benchmark metal price also buoyed sentiment in China, where some panic restocking lent support to downstream cobalt salts prices in the country.

Key quotes
– “It’s a good indication of how the market is moving to see prices locked in for the long term, [and it] gives visibility to the strength of the market, although total volumes are still relatively small.” – a consumer

“We are interested in CME trading ourselves… I think everyone is very positive on the outlook for cobalt over the next two years and sees $25/lb as good value going forward.” – a trader

“The market has been volatile over the past two-to-three years, so people are looking at ways to manage risk. [And while] there is still not enough liquidity, people are certainly pushing for it,” – a distributor

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