THE FUTURE OF COBALT PRICING: The concerns about LME-based contracts
"....The growth of the LME contract, combined with concerns about assessed prices largely due to the reduced size of the spot market, have
led some producers to consider pricing basis the LME.
But market participants do have concerns about using the LME as a pricing reference.
When the LME contract was launched, many critics argued that the cobalt metal business was too small to justify an effective terminal exchange contract and that such small markets are best left to industry participants to monitor and determine viable pricing.
While trading volumes and stocks have since grown, cobalt buyers are still largely resistant to exchange-basis pricing.
The concern for many is that liquidity is still low, meaning prices are volatile and spreads can be wide.
Although they are growing, sources also point to low LME stock levels,
which some fear could lead to a small number of players having a worryingly large impact on the whole cobalt complex.
....But, unlike when purchasing directly from a seller, the structure of the LME primary market does not allow buyers to specify cobalt brand, impurity limits or location of the material. "
https://do not advertise external s...G-The-concerns-about-LME-based-contracts.html
@mouse is that cleaner now?
