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UPDATE 1-Cobalt driven to new record high by strong demandThu...

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    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.
 
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