Cobalt drops on strong competition to book thin spot enquiries

Cobalt metal prices fell on Friday as suppliers competed for the few spot enquiries in the Asian and European markets.

Low-grade prices dropped to $12.10-13.20 per lb from $12.20-13.30 while high-grade moved to $12.60-13.30 per lb from $12.80-13.50.

A four-tonne deal in Asia was booked at $12.05 per lb on an in-warehouse basis, one large supplier said.

The desire to liquidate a particular low-grade in a particular location caused the seller to discount his offer price by around 5 cents per lb, the source said.

Shortly after Metal Bulletin’s pricing was concluded a European consumer bought around three tonnes of low-grade at $12.10 per lb, with several sources saying that they were interested in making the sale before it was concluded.

“I don’t see the market at $12 per lb yet, but I do think November will be a difficult month,” a supplier source said.

“I don’t see things below $12 yet, but there are a couple of producers, I believe, that have units to sell.”

But a trader dismissed the view that the market has much further to fall.

“She’s ground to a halt on the downside.

“There is good resistance [to making sales]in the low- to mid-12s. We’re a buyer of briquettes at $13 per lb,” he said.

Low-grade cobalt prices have slid from $13-13.70 per lb since October 9, but even so the sale in Europe took a second trader who participated in the business by surprise, having himself offered at almost $1 per lb higher.

“That’s an aggressive number, given the 30-day credit terms and delivery terms,” the second trader said.

“There is tough competition out there.”

Some brushed aside the slide in the market in recent weeks to focus on grades. “It’s a tale, really of two grades,” a third trader said.

“Briquettes are tight, and well-sold, and good broken cathode is also in demand. But the guys with cut cathode will have the greatest difficulty in liquidating,” he said, noting increased production of that material.

Others chose to focus instead on long-term contracts.

“Long-term discussions for metal are going well. There is increasing demand for metal,” a second producer source said.