CME cobalt hydroxide futures reach 1,000 lots of open interest

The contracts, which are underpinned by Fastmarkets’ cobalt hydroxide, min 30% Co, inferred, China price, launched in October 2023.

The 1,000-lots mark was reached for the first time on Monday August 12 following daily trading activity of 120 lots. August has been the busiest month since launch, with a total of 720 lots traded.

The trades on Monday were spread across the six contracts dated for the second half of 2025 at a price of $7.50 per lb.

Stemming from the market wanting to directly hedge physical hydroxide volumes, the contracts that reach out to June 2026 have attracted interest from a wide range of market participants.

“We’ve noticed an increase in liquidity on the cobalt hydroxide futures contract listed on CME recently for several reasons. Despite the market being at current lows, participants are happy to lock in their forward trades. It makes sense for the players to start averaging up or down their books,” said Robin Tisserand, head of battery metals at SCB Group.

“Taking in account that cobalt hydroxide is the feedstock for cobalt metal, and the spread between the two at around $5+ [per lb], we have seen significant interest in the market to look at derisking their whole supply chain from the input to the output,” Tisserand added.

Anna Chadwick, head of battery metals at Freight Investor Services, said: “It’s great to see open interest breach the 1,000 [lots] mark, with several new counterparties looking to utilize the contract as a hedging mechanism. This burst of liquidity is a signal of an increasing willingness of the market to diversify their hedging tools in the battery metals space.”

Fastmarkets’ cobalt hydroxide, min 30% Co, inferred, China was calculated at $6.25 per lb on Wednesday, down from $6.38 per lb on August 1.

The daily cobalt hydroxide inferred price is calculated as the low-end price of the cobalt standard grade, in-whs Rotterdam price multiplied by the prevailing midpoint of the Fastmarkets’ cobalt hydroxide payable indicator, min 30% Co, cif China.

“It is encouraging to see the cobalt hydroxide open interest grow. Ultimately, the CME cobalt metal contract remains the preferred hedging tool for the majority of market participants and a return of liquidity to that contract would be welcomed by consumers and traders alike,” said Michael Greenfield, battery metals broker at GFI group.

Cobalt metal prices have declined to eight-year lows following an increase in supply that has put pressure on the market during a seasonally quiet period of the year.

Global cobalt supply has surged this year following a ramp-up by the largest producer, CMOC, who reported a 178% year-on-year increase in production at 54,024 tonnes for the first six months of 2024.

According to the latest analysis by Fastmarkets’ research team, the market balance will be oversupplied by 23,000 tonnes in 2024, with this narrowing to 15,000 tonnes next year.

Cobalt hydroxide prices were unchanged this week following an unrelated trade dispute that resulted in the temporary closure of the border between Zambia and the Democratic Republic of Congo.

Fastmarkets daily price assessment for cobalt hydroxide, 30% Co min, cif China was at $6.30-6.50 per lb on Wednesday, unchanged from the previous session.

Our cobalt prices are market-reflective, unbiased, IOSCO-compliant and widely used across the energy commodity markets. Track cobalt commodity prices daily with Fastmarkets. Find out more.