Low-grade cobalt price hits its highest level since October

Low-grade cobalt prices continued to climb this week, hitting an eleven-week high on Friday December 19.

Low-grade cobalt prices continued to climb this week, hitting an eleven-week high on Friday December 19.

The low-grade low jumped 20 cents from the Wednesday December 17 level to put the range at $14-14.50 per lb, marking the first time since the start of October that the whole market has been trading above $14.

An anticipated tightening in supplies in 2015, the result of bullish long-term discussions, has improved sentiment generally over the past month. Sellers have raised their offer prices as a result and bids were reported higher this week too.

“I see no offers and am bid $14 from the trade,” one trader said.

Low-grade prices also found support from news of a potential reduction in supplies coming from ENRC’s Chambishi operation in Zambia.

The volume of business was limited, however, and the higher numbers were attributed to positive end-user sentiment and strong demand expectations for 2015, as opposed to a pick-up in spot metal demand.

Business was transacted in a tight range in the second half of the week, mainly between $14.25 and $14.35. For all the latest business, click here.

“There’s no news on metal, but sales of end-products look excellent in December, possibly triggered by the price rise,” a consumer said. “I’ve decided to delay sales to get a better price in January.”

The expected tightness offset the negative sentiment that typically weighs on the market in the lead-up to Christmas.

Many consumers are about to shut down until the New Year, however, which could provide a ceiling for prices.

Sellers, meanwhile, could see some added pressure to sell in the final weeks of the year in order to square their books.

“We have had some offers, but not firm prices as the market is rising,” a second consumer said. “It’s still the end of year, so people will try to sell to get the material out of their warehouse.”

Signs of this were emerging on high-grade this week, as at least one seller looked to sell very competitively ahead of the year-end.

High-grade cobalt prices consequently remained stable at $14-14.70 on Friday, almost on par with low-grade.

Sources said that pressure to offload over the next week could lead high-grade cobalt to trade below low-grade cobalt, where tighter supply is being reported.

Read on: 2015 PREVIEW: DRC, China and Cuba could drive shake-up in cobalt trade flows next year and beyond

Fleur Ritzema
Twitter: FleurRitzema_MB

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