Tight intermediates availability and a rally in the cobalt hydroxide market brought cobalt metal back in favor with cobalt sulfate refineries looking to cut risk in their feedstock inflows in late July.
Until then, cobalt hydroxide payables - the percentage of the metal price buyers pay sellers for cobalt intermediates - had been capped at 70% for at least a year and a half, reflecting ample supply of the raw material used to make cobalt salts.
While many cobalt refineries can also use cobalt metal - typically in the form of briquettes or broken cathodes - to produce cobalt sulfate via leaching - that has not been cost-effective, or necessary, for much of the past two years.
During that time, cobalt hydroxide availability has been sufficient to meet demand, and correlated low payables have meant it is unappealing for refineries to diversify their feedstock with metal.
For their part, sellers have been unwilling to take aggressive discounts buyers have requested against Fastmarkets' price assessment for cobalt standard grade, in order facilitate metal sales to the chemical sector.
But refineries have been topping up their inventories with metal...