Low-grade cobalt prices have dropped to their lowest level since July as an absence of consumer enquiries prompted sellers to lower their offers.
Prices hit a ten week low on Wednesday September 24 of $14.10-15 per lb, down from $14.30-15.10 on Friday September 19.
For all the latest trades, click here.
High-grade prices held at $14.55-15.45 with no trades reported.
The lack of enquiries on both grades was the result of consumers stocking up ahead of an anticipated rally in September, sources said, noting that such a rally has so far failed to materialise.
Conversely, this stocking up dampened demand in September.
“General market sentiment is that demand is softening. It’s a strange one. Before the holidays it was really bullish,” a trader said.
At least one producer has been offering competitively over the past week, sources said, while traders in Asia have also been aggressive.
Sellers have had to lower their offer prices.
“It would be very difficult to sell above $15 today on low-grade,” the trader said.
Consumers confirmed a reduction in demand.
“If our business is a reflection of the market, I could understand why prices are falling,” a consumer, who had not been in the market this week, said.
A second consumer had not purchased due to concerns about building stocks ahead of further price falls.
“A lot of people want to sell. As a buyer, I don’t think the prices are low enough, but sellers aren’t budging enough,” the consumer said.
“For us, we don’t want to take on too much risk,” he added.
But, despite the near-term weakness, the strong longer-term fundamentals reported since the start of the year remain, sources said.
“I don’t see massive oversupply. Most of the producers are tight,” the first source said.
“Demand for 2015 is going to be better. The Asian markets are very bullish,” a producer said.
Fleur Ritzema email@example.com Twitter: FleurRitzema_MB