UPDATE 1-Cobalt driven to new record high by strong demand Thu Dec 13, 2007 5:03pm GMT
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LONDON, Dec 13 (Reuters) - Cobalt prices on the spot market in Europe have risen to record highs near $40 a pound this week, driven by rising consumer demand and speculative buying, traders said on Thursday.
The metal COB-CATH-LON used to make batteries and aircraft components was trading at $39.5 a pound compared with $38/$39 a pound last week. Prices are up by nearly 50 percent since January.
"Demand has been strong and is getting stronger. There is some speculation involved as well," a UK-based trader said.
"But the move is fundamental ... China is really struggling to get the raw material for processing cobalt."
Traders said a lot of Chinese producers had closed because they couldn't get the concentrate, partly because of supply problems in the Democratic Republic of Congo.
Rising demand from battery makers also played a part.
"As contract negotiations come to an end, consumers have been diving into the stock market," a Europe-based trader said.
London-listed miner BHP Billiton (BLT.L: Quote, Profile, Research) last sold high grade cobalt at $39.75 a pound and is offering at $43 a pound.
"$43 is a little optimistic now, we may get there next year," the UK-based trader said.
Cobalt COB-ING-LON from Russia's Norilsk Nickel (GMKN.MM: Quote, Profile, Research) last changed hands at $36.59 a pound. Norilsk is now offering at $38 a pound.
CMR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
