Cobalt sentiment set to push higher with first weekly average price rise since October

Cobalt metal prices increased in the week to Friday March 3, which could signal a change in sentiment following weeks of price declines across both the standard and alloy grades

Price weakness has been evident in most of the cobalt standard-grade market in the past few months, and indications of restocking among both trade and consumers have pushed both grades to their first weekly average increases since October 2022.

“I think sentiment is a little more positive this week. We’re seeing more demand from Asia, Europe and the US,” one European trader said.

Market sentiment seemed to have been further buoyed by comments from Glencore chief executive Gary Nagle during his company’s annual results presentation on February 15. “We can always look at various supply responses, as we have done previously,” Nagle said, “and we are not shy about pulling back production.”

There was hope among some traders and producers that the recent increases could be a sign of the market moving away from the low price point of $15.00-16.25 per lb for cobalt, standard grade, in-whs Rotterdam, that was assessed on February 20. It was most recently assessed at $15.15-17.00 per lb on March 3.

“It was a pretty dire February for the market, [but] it’s a new month now so some might have targets in mind for monthly averages,” a second trader said.

The February 2023 monthly averages for both alloy and standard grade were the lowest recorded since December 2020.

In the period to February 2023, the standard-grade cobalt price showed four consecutive months of double-digit percentage declines in the monthly average, following a decrease in cobalt intermediate prices and poor demand for consumer electronics.

Cobalt sulfate and hydroxide prices have strengthened since the middle of February, however, following an increase in buying amid reports of restocking activity in China. This was the first time in four months that cobalt sulfate prices had increased.

Fastmarkets’ cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low-end), rose to 55-62% against the standard-grade cobalt metal price (low end) on Friday, up from 54-59% on February 24.

It was not clear whether the price rises would continue through March, with traders offering mixed opinions during Friday’s pricing session, in which standard-grade prices fell back slightly from rises made the day before.

Fastmarkets’ daily price assessment for cobalt, standard grade, in-whs Rotterdam, was $15.15-17.00 per lb on March 3, down from $15.30-17.40 per lb previously. This was, however, up compared with the week before, when the price was assessed at $15.00-16.25 per lb on February 24.

“I would say that a fair percentage of the market is turning around for higher prices now on standard grade, but there are still pockets of opportunity in the low [$15s per lb], which is repeatedly offered, while some are able to sell in the high [$16s per lb] too, which has left a wide range,” a third trader said.

“I find it difficult to see higher numbers, personally. We’ve offered [material for sale] in the mid [$16s per lb] and were told that lower numbers were booked on the inquiry,” a fourth trader said.

Alloy grade has shown a premium against standard grade, which developed in late 2022 when the spot availability of certain alloy brands dwindled. This premium was still present in the market, following healthy demand.

“Alloy grade is a much tighter market, which is why the [price] range is narrower. There is good superalloy demand in the US, on both a spot and forward basis,” a fifth trader said.

Fastmarkets’ daily price assessment for cobalt, alloy grade, in-whs Rotterdam, was $16.95-18.40 per lb on March 3, widening from $17.00-18.00 per lb previously.

Keep up to date with the latest news and insights on our cobalt market page.

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