Cobalt prices show marginal declines as slow summer continues

Spot cobalt prices fell slightly in the week ended Friday August 24, despite signs that material was not as readily available as it had been in recent months, with some buyers yet to return from their summer break.

Low-grade prices maintained their slight premium over high-grade, amid acute tightness among broken cathodes and greater competition for high-grade sales.

Low-grade cobalt prices ended the week at $33.00-33.70 per lb, according to Metal Bulletin’s assessment. Prices had narrowed earlier to $33.20-33.70 per lb, from $33.20-34 per lb on August 17.

High-grade cobalt prices were unchanged on August 24, assessed at $32.70-33.70 per lb, in warehouse. Prices fell by $0.30 on August 22, having started the week at $33-34 per lb.

“There are high-grade units [available] but if you want low-grade it’s not there,” a producer said.

Both markets were markedly more stable than in recent months. Low and high-grade cobalt prices have come down by 16.9% and 17.6% respectively since the end of June.

There are indications that the price will go up. Demand is healthy but not in the spot market yet. Chinese traders are still inclined to offer lower, but less so than in July and early August,” a trader said.

Others echoed the sentiment that sellers, particularly in China, are sitting on depleted stocks after aggressive summer selling, and are less eager to sell than they have been.

“There seems to be less pressure on the sales side and we’ve had no unsolicited offers this week. I’m not sure if [the market is] still dropping but there’s no real turnaround just yet,” a consumer said.

For the time being, there remains slight pressure on prices, with sentiment yet to resolutely turn after a protracted summer of falling prices. “There are stray [cheap] lots here and there,” the producer said.

Real demand – including for larger volume clips – is expected to return in the coming weeks when European market participants return from their summer holidays. The underlying tightness is expected to bite when that happens.

“If you try to buy any reasonable quantities – 10 or 20 tonnes – you’ll be unable to find it,” a second trader said.

“In the [range of] $40 [per lb], people wanted to sell their long positions and they didn’t replace the units,” a third trader said. “They’re operating at a fraction of the stocks compared with a few months ago.”