PRICING NOTICE: Proposal to amend specification of cobalt hydroxide payable indicator

Fastmarkets proposes changes to the specification of its cobalt hydroxide payable indicator.

The proposal is to change the payment window to include trades agreed on the basis of the following month’s average metal price (ie, M+1).

This amendment will allow Fastmarkets to consider more spot liquidity within its assessment of cobalt hydroxide payables. Data collected since the launch of two reference prices for cobalt hydroxide in February, as well as feedback collected from market participants, suggests little to no difference in the payables agreed on the basis of the current month (M) or following month (M+1).

The consultation period for this proposed amendment will end one month from the date of this pricing notice, on Friday July 5, with changes taking place, subject to market feedback, from Monday July 15.

Following the amendment, the specification for the payable indicator will be as follows:

Assessment: Cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low-end)
Quality: Chemical composition, min 30% cobalt
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, $/lb)
Payment terms: Letter of credit, current and following price month (‘M’ and ‘M+1')
Publication: Twice a month on the 15th and last working day of the month, 3pm London time. (Where the publication day falls on a weekend or a public holiday in England and Wales, the assessment will be published on the closest working day preceding that date)
Notes: Material produced at Katanga, Mutanda and Tenke in the Democratic Republic of the Congo

Fastmarkets will review the chemical and brand specifications of its cobalt hydroxide prices in August 2019, with the benefit of six-months’ pricing data.

Since the calculation of the cobalt hydroxide index -a single figure expressing the price is US dollar per lb - requires the monthly average cobalt metal price if the spot indications and assessments are given as payables, there is no change to the index specification.

To provide feedback on the proposed amendment or if you would like to provide price information by becoming a data submitter to the cobalt hydroxide reference prices, 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 assessment.’

To see all Fastmarkets’ pricing methodology and specification documents go to https://www.metalbulletin.com/prices/pricing-methodology.html.

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