Open consultation on methodology for cobalt hydroxide index

Fastmarkets, which currently calculates the index weekly on Fridays and publishes as a single number, proposes to publish the cobalt hydroxide price daily through an assessment pricing mechanism as a range.

The move from an index-based pricing mechanism to an assessment means that Fastmarkets will publish a price based on data it deems reflective of the open and competitive market, using its expert editorial judgement — moving away from a calculated tonnage-weighted price.

A ranged assessment allows Fastmarkets to offer the market a robust pricing mechanism that reflects changing market dynamics.

The proposed increase in frequency to a daily publication will also allow Fastmarkets to better capture fluctuations in a liquid market.

The consultation period for this proposed amendment starts on Friday July 21 and concludes on Friday August 25.

Fastmarkets is making this proposal in response to feedback from market participants amid increased cobalt hydroxide liquidity on an outright basis and expectations of further spot availability in the cobalt hydroxide market, in order to better reflect market dynamics.

The proposed increase in frequency and changes to the pricing mechanism will take place from Friday September 1, subject to the outcome of this consultation.

The specifications for the price series, incorporating the proposed changes in frequency, are as follows:

MB-CO-0020 Cobalt hydroxide 30% Co min, cif China, $/Ib
Quality: Units produced from large-scale mining activity, with the following chemical composition: Co 30% min, Mn 6.5% max, Mg 6.5% max, S 5% max; Cd 100ppm max; limited concentration of natural radioactivity: GB20664-2006 (suitable for customs clearance into China).
Quantity: Min 50 tonnes (cobalt content)
Location: cif China (other terms normalized)
Timing: 45 days
Unit: USD/lb
Payment terms: Letter of credit at sight, current price month (‘M’)
Publication time: Daily, 2-3pm London time

To provide feedback on this consultation, or if you would like to provide price information by becoming a data submitter to the cobalt hydroxide 30% Co min, cif China, please contact Alex Cook by email at pricing@fastmarkets.com. Please add the subject heading ‘FAO: Alex Cook, re: Cobalt hydroxide.’

To see all of Fastmarkets’ pricing methodology and specification documents, please go to https://www.fastmarkets.com/methodology.