PRICING NOTICE: Decision to suspend amendment of cobalt hydroxide payable indicator, cobalt hydroxide index specifications

Fastmarkets initially proposed a maximum 3% iron threshold, which it then increased to a 5% threshold, aligned with initial market feedback.

Feedback on one hand suggested that iron impurities in cobalt hydroxide commonly traded in the spot market had not proven material to negotiations to date, and that therefore a high threshold, or no threshold at all was necessary. On the other hand, some feedback suggested that a threshold should be much lower to better pinpoint the value of particular specifications and purity levels. There was also some concern that a higher iron tolerance would result in too wide a spread of data being collected, so as to diminish the utility of Fastmarkets’ price assessment.

Limited spot liquidity in the spot market and insufficient diversity of data means Fastmarkets has so far been unable to conduct its own analysis of cobalt hydroxide impurities and their effect on price and payables.

Therefore, after a consultation period, Fastmarkets has determined that current circumstances do not make the specification amendment to include iron content viable.

Fastmarkets is ending current consultation and plans to revisit the amendment in three months’ time, at which point it will revisit the data collected from its price discovery, to identify whether or not iron content has a meaningful impact on cobalt hydroxide prices and payables.

The detailed specifications for two prices involved are, for the time, being unchanged and as follows.

MB-CO-0021: Cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low end)
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: % payable of Fastmarkets’ standard-grade cobalt price (low end, $ per lb)
Payment terms: Letter of credit at sight, current and following price month (‘M’ and ‘M+1’)
Publication: Twice weekly, Wednesday and Friday, 3pm London time
Notes: Where the publication day falls on a public holiday in England and Wales, the assessment will be rolled over from previous pricing session.

MB-CO-0020: Cobalt hydroxide index 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: $/lb
Payment terms: Letter of credit at sight, current price month (‘M’)
Publication time: 5pm London time, last working day of the month.

All historical data relating to the assessments will remain available in the pricing section of the Fastmarkets website.

To provide feedback on the cobalt hydroxide price assessments, or if you would like to provide price information by becoming a data submitter, please contact Charlotte Radford and Susan Zou by email at: pricing@fastmarkets.com. Please add the subject heading ‘FAO: Charlotte Radford/Susan Zou re: cobalt hydroxide price assessments.’

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