POLL RESULTS: Will the sale of the LME to HKEx help drive up volumes in LME cobalt?

The sale of the London Metal Exchange (LME) to Hong Kong Exchanges and Clearing may increase volumes in LME cobalt, although the sceptics remain, a recent industry poll suggests.

Last month, Metal Bulletin asked participants: “Will the sale of the LME to HKEx help drive up volumes in LME cobalt?” 

Opinion was split, with a significant 32% of respondents answering “yes”, while a further 24% answered “maybe”.

But at 44%, just less than half of respondents answered “no”.

Some market participants suggest that low liquidity, a lack of consumer buying on the exchange, and decades of reliance on alternative pricing systems, including Metal Bulletin’s own published prices, continue to limit growth of the LME cobalt contract.

But LME cobalt volumes surged 91% in the January-July period of 2012, compared with the corresponding period last year, the exchange said in a release last week.

Cobalt also reached record market open interest in March 2012 at 619 lots.

“LME cobalt volumes have been steadily growing in 2012,” Chris Evans, head of business development at the LME, said.

“The numbers speak for themselves […] There has also been constant activity in terms of movements in and out of warehouses,” Evans told Metal Bulletin recently.

LME cobalt was trading at $28,638/29,500 per tonne ($12.99/13.38 per lb) on Monday August 20.

Have your say
Metal Bulletin is once again polling the industry.

We’re asking: “To what extent will the partial closure of Ilva’s Taranto steelworks impact sentiment across the European steel market?”

Visit the Metal Bulletin homepage to have your say and to see the results.
http://www.metalbulletin.com

Fleur Ritzema
fritzema@metalbulletin.com
Twitter: FleurRitzema_MB