Cobalt sellers chase higher prices as bull market takes shape

Cobalt sellers chase higher prices as bull market takes shape
Cobalt prices moved further into bull-market territory on Friday September 16 as stockholders grew more confident about chasing higher-priced sales.


Metal Bulletin low-grade cobalt prices rose to $12.30-13 per lb on Friday, up from $12.15-12.80 on Wednesday, while high-grade prices stood at $12.50-13.20, up 50 cents on the high end.

Adopting the often-used definition of a bull market as one that rises by more than 20% from a cyclical low point, cobalt prices entered a bull market on July 15, when the low-grade price reached $10.95, up 21.67% from lows of $9 seen in December.

Taking Friday’s price move into account, the low-grade low cobalt price is now up 36.67% from its lowest point reached in December, and there are broad expectations that prices could move higher still going into the fourth quarter as consumers turn jittery about supply and investments in the electric vehicle sector continue.

While the volume of sales dropped this week following brisk trade seen at the start of September, buyers who were making enquiries found most traders and producers in a bullish mood.

"It’s not tearing away, but it seems everyone is singing from the same hymn sheet," one trader told Metal Bulletin.

Among the concluded sales reported during Friday’s pricing session were a ten-tonne low-grade sale at $12.40 per lb and a five-tonne sale at $12.50 per lb, while the highest price for high-grade reported was a 1.5-tonne sale at $13.20 per lb.

"Things are still a bit quiet at this point, but prices are getting steadily stronger as the year goes on. Our own stocks aren’t that plentiful, and if prices do come back down then we’ll just sit through it," a seller in Europe said.

Traders in Japan were also submitting higher offers in consumer enquiries in the domestic market this week, although there were indications that some sellers were still willing to let go of material at around Metal Bulletin’s low-grade price.

"I offered a 20 cent premium on the low-grade low in a five-tonne enquiry, but it seems we missed the business," a trader in Japan said. Further details about the enquiry could not be confirmed during Friday’s pricing session.

Away from the spot market, market participants were also waiting for superalloy customers in the USA to act on offers for material to be supplied under contracts next year, while key talking points included the extension of the deadline for Lundin to declare whether it intends to exercise its right to buy Freeport’s stake in the Tenke Fungurume project, with some sources suggesting that that the miner may be working to put a funding package together to buy the mine.

A report from CRU predicting a 50% increase in global demand for refined cobalt through to 2025 also reinforced bullish sentiment, as did rumours that Volkswagen will announce major new investments in electric vehicles at the upcoming Paris Auto Show.