COBALT HYDROXIDE SNAPSHOT: Payables show modest increase while metal price plummets

Key data from the Thursday February 28 pricing session in Europe.

Key drivers 
Cobalt hydroxide payables rose steadily over January and February while metal prices plummeted; lower metal prices are understood to have pushed some artisanal supply out of the market, generating greater interest in traceable units. In real terms, paid prices for cobalt hydroxide continued to slide in February due to enduring concerns over inventory levels and some reluctance to stock up in a falling market. Payables with a February quotation period (QP) consolidated at around 65% in the second half of the month, compared with 62-64% in the earlier part of February, though sellers held out for higher numbers for deals with QPs further ahead on the expectation that benchmark standard-grade cobalt prices still have some room to fall.
Key quotes
"It has been very rare to hear any offers for payables just slightly higher than 60% since the Chinese New Year holiday (February 4-10), because the benchmark [metal] price is falling too quickly" - first consumer
"We're getting bids at 65% for April but that's not appealing when you consider metal possibly has another $1-2 per lb to fall" - a trader
"Chinese buyers are in favor of fixed-price quotation for cobalt hydroxide due to unclear picture of benchmark cobalt [metal] price" - second consumer
"The spot volumes have been small. You're taking a bet on a payable when you look at the falling [metal price]" - a producer

Fastmarkets launched two reference prices for the cobalt hydroxide market on Thursday February 28. Click here for the details.

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