High-grade cobalt prices in North America have risen to an...

High-grade cobalt prices in North America have risen to an average $15.50/lb this month from a cyclical low of $13 in February. Buyers are predicting cobalt at or above $20/lb in the second half of 2006 based on increased demand from the largest market sector, the makers of superalloys who sell their specialty metals to parts makers for gas turbine aircraft engines. However, traders say cobalt could sell for $35 to $50 in the second half if a strike reduces output at Inco's Sudbury nickel mine and smelter in Canada.

Inco officials in Toronto are hopeful that a new labor contract will be settled without a strike at Sudbury. Such commentary, however, hasn't stopped speculation in the trade about the possibility of there being work stoppages or slowdowns.

Traders tell Platt's Metals Week, for example, that if a strike lasts for three months, up to 250 metric tons of high-grade cobalt would be taken out of the market. The newsletter reports of signs of buyers seeking out European suppliers to ensure their supplies in the event of a Sudbury strike.

Some market analysts are projecting 2006 demand growth for cobalt in the U.S. of almost 8.5% to 21,666 metric tons because of the soaring demand from the aerospace industry and, lately, from manufacturers of industrial gas turbines. That may be why some buyers say the July-December pricing is immaterial because their firms are booking cobalt and cobalt-bearing superalloys for 2007 delivery