| August 28, 2008 US cobalt prices leap on talk of producer shortages Publisher: Platts Author: Anthony Poole | |
| New York (Platts)--28 Aug 2008 Cobalt prices have leapt nearly $9/lb in the space of a week in the US as the market rebounds sharply from the trough reached mid-last week. This has occurred amid reports of one Asian producer being sold out until late October and BHP selling nearly 100 mt in just over a week after several weeks of virtually no sales. The Platts assessment for 99.8% high-grade cathode rose Thursday to $33.00-34.00/lb delivered US from $25.50-27.50/lb a week earlier. The rebound, which intensified Monday, began late last week as traders, searching to secure supplies of Jinchuan and Xstrata Nickel (Falconbridge) cobalt, reported being unable to obtain metal on the open market. One source told Platts that after looking for 5 mt of either Jinchuan or Falconbridge, he was forced to buy from BHP and paid $26/lb DDP North America late last week. BHP added to its tally of sales in the last week, selling 5 mt for September delivery Thursday at $33.00/lb DDP North America, having sold at $31.50 two days earlier. BHP raised its offer price to $34/lb late Thursday. Consumers in the US said they believed they would have to pay $33/lb for high-grade cobalt, especially Falconbridge, with one purchasing agent adding: "If I dithered, it might be $34. Ask me tomorrow, it might be $35." Traders and producer sources pegged the high-grade in a broad range of $32-34/lb, although some said narrowed it to $32-33/lb, saying that most of the activity had been for Russian K1A and K1Ay. A European trader reported selling 2 mt of K1A on an in-warehouse basis in the US at $30.25/lb for September delivery, adding that another 15 cents freight would apply to most US East Coast and Pennsylvania/Ohio destinations and 50 cents for delivery to the US West Coast. The Platts assessment for Russian 99.3% cobalt rose Thursday to $30.00-31.00/lb delivered US, from $24-25/lb a week earlier. Another European trader reported selling less than 5 mt on an in-warehouse Europe basis at $30.25/lb. And a US trader reported selling a small volume at $31/lb on a delivered basis in the US. Consumers said the speed and veracity of the rebound was largely due to it being pushed down aggressively in the first three weeks of August, after it had moved down incrementally from mid-May in the seasonally slack summer months. "For most of the year, we've been told cobalt is very bullish, demand is at unprecedented levels and then, in the last weeks, those same people have been talking lower and lower numbers, saying the Chinese have plenty of metal," said a second consumer. "Now I've got people telling me cobalt could be back up to $45 in a month's time and yet, a week ago, they thought it was headed to $20 before it bounced." The first consumer concurred: "The aggressive drop wasn't based on any business that I heard. A couple of traders reporting false low sales, who wanted to get the published numbers down enough to buy... but trying to actually buy cobalt at the $23s and $24s was impossible. It couldn't be done. There were no sellers at those numbers," he said. The only way of buying metal was to go to producers, which he described as a "measure of last resort." "Who does it serve? Only the traders. They've done it to inflate their margins and they've screwed the producers and the consumers at the same time," he added. Traders in the US and in Europe said they believed some trading houses had bought material on a formula with the price based on the average published prices for August and had deliberately talked the market down. One European trader said: "Someone's pricing in some purchased material on formula, based on the published average for August and [trying] to keep the average down." The trader added that all this would change after September 1, predicting: "They'll be bullish again." Meanwhile, traders in Europe and in the US said that they had heard that Chinese producer Jinchuan had virtually sold out of cobalt and was now offering high-grade 99.95% cathode at $32/lb DDP Europe, but with shipment not before October 31. Last week, it was offering at $23.50 ex-works in China. Jinchuan could not be reached for comment. A second trader in Europe said that a customer had called looking for material, saying "You're my last hope." The trader reported receiving several consumer inquiries this week but did not have sufficient metal to satisfy the inquiries. "I haven't been able to offer the material that people wanted. I've had to turn quite a few customers down." A third European trader said the market had "pole-vaulted" and consumers "are now waking up to what's gone on and the inquiries are coming in thick and fast from European and US consumers." --Anthony Poole, anthony_poole@platts.com -END- | |
| August 21, 2008 Mining cobalt, and sound practice, in Idaho Publisher: Lewiston Tribune Author: Jim Fisher | |
| What's this: a mining company that gives something other than the back of its hand to environmental organizations, and an environmental organization that helps a mining company get the regulatory approval it needs? The Idaho Cobalt Project promises to be more than the first cobalt mine to open in the United States in decades. It also commits itself, verbally and financially, to avoiding contamination of natural systems while in operation and to leaving the land as close as possible to its former condition when the mine's life is over. In exchange, the Idaho Conservation League expresses confidence that the more than 190 high-paying jobs the project will provide, in both the Salmon and Kellogg areas, won't come at the expense of natural surroundings, as has happened in both areas in the past. Formation Capital Corp., based in Vancouver, Canada, projects an annual payroll of about $9.5 million to the 157 workers at the mine 45 miles west of Salmon and another 39 people at the company's refinery between Kellogg and Wallace. It says more than $8 million will be generated in tax payments, much of it to Lemhi County taxing districts. "The best way to protect Idaho's environment and values is to work with companies instead of having an adversarial relationship," says Rick Johnson, executive director of the Idaho Conservation League. "They said they were serious about being good neighbors here." Johnson said the growing need for cobalt, whose industrial uses include a role in the batteries used in hybrid cars, also figured into the ICL's decision not to oppose the mine. It couldn't have hurt, either, that one of the ICL's most prominent members, former Gov. Cecil Andrus, is a proponent of the project. Andrus also is a member of Formation Capital's board, but even out of government the popular Democrat has no record of lending his name to developments that are environmentally unsound. "The company has said it's important that we are different from a historic mining company," says Andrus, who was first elected governor in 1970 on a campaign against a proposed molybdenum mine in central Idaho's White Cloud Mountains and who has since been viewed with suspicion by the mining industry. In the end, though, it is less the lineup of stars working in this project's favor than Formation Capital's financial commitment to environmental protection that earns thumbs up for this mine. "They were willing to bond for water treatment into perpetuity," says the ICL's John Robison. And the ICL therefore was willing to suppress a reflexive reaction against new mining in a region that has seen more than its share of despoliation. That combination is no happy accident. It is the result of tough - and good - work from both parties. - J.F. -END- | |
| August 05, 2008 Sony to Raise Output of Batteries Publisher: The Wall Street Journal Author: Kenneth Maxwell | |
| TOKYO -- Sony Corp. became the latest Japanese company to step up investment in the booming lithium-ion-battery business, saying it will pay 40 billion yen ($371 million) to increase domestic output of the cells that power many consumer-electronic products. Sony,maker of the PlayStation videogame and the Walkman music players, said the investment is part of a drive to nearly double monthly output of the cells within two years. The rechargeable batteries are used in devices such as mobile phones, laptop computers and digital cameras. Sony said the investment, along with plans to expand lithium-ion battery operations in Singapore and China, should increase its monthly output capacity from the current 41 million cells a month to 74 million a month in fiscal 2010. That should help it keep pace with rival Matsushita Electric Industrial Co., maker of the Panasonic brand of consumer electronics. Matsushita recently unveiled a major drive to beef up its relatively small presence in lithium ion-cell manufacturing, pledging 100 billion yen to build a plant in western Japan that should help it triple production to about 75 million cells a month. In early July, Sanyo Electric Co. confirmed that it plans to invest 125 billion yen to develop its rechargeable-battery business over the next three fiscal years in a move to increase output to about 90 million cells a month from 70 million. With overseas rivals such as Samsung SDI Co. also aiming to cash in on growing global demand for the batteries, Japan's electronics makers want to make sure they don't lose out. According to Tolko-based research and consulting firm Yano Research Institute, global demand for lithium-ion batteries for portable electronic equipment will likely keep showing double digit growth through 2009 followed by a rise of more that 5% annually after that. Late last month, Sony reported net profit for its fiscal quarter ended June 30 sank nearly 50% as sales of high-end mobile phones and cameras slid in developed markets because of weak consumer spending. The company, just emerging from a three-year restructuring, lowered its forecast for net profit in the fiscal year ending March 31 by 17%. -END- | |
| August 05, 2008 Cheaper 'supermagnets' could drive future hybrid cars Publisher: EE Times Author: R. Colin Johnson | |
| PORTLAND, Ore. --- Rare earth permanent magnets could enable smaller, higher-performance motors and power generators. The rub is that they require an expensive, multi-step process to fabricate. Now, Northeastern University researchers claim to have invented a cheap, green, one-step process for creating samarium cobalt permanent magnets. Cutting the cost of producing the powerful magnets could usher in a new breed of hybrid automobiles using smaller, cheaper motors. Space and aircraft applications are also possible. Lead scientist C.N. Chinnasamy of Northeastern University's Center for Microwave Magnetic Materials and Integrated Circuits, said samarium cobalt -- the strongest of the rare earth magnetic materials -- could be manufactured using recyclable chemicals. The manufacturing process would be scalable for high-volume production, and magnets could be built at a fraction of their current cost, Chinnasamy added. "Rare earth magnets are essential to NASA and [the Defense Department] for small, high-performance motors and power generators that can operate in high-temperature environments," said Chinnasamy. "With our process, they can be manufactured much more economically." Chinnassamy worked under the direction of principal investigator Vincent Harris, director of the Center for Microwave Magnetic Materials and Integrated Circuits. Harris said samarian cobalt magnets are well suited for use in aircraft turbines where temperatures are too high for other types of rare-earth magnets. Chinnassamy's single-step process "is not only less expensive, but the chemicals he uses to make them can be recycled over and over again in a green process that is perfect for high-volume manufacturing," Harris claimed. The researchers came up with a nanotechnology approach to manufacturing that replaces the expensive, multi-step metallurgic technique currently used to make rare earth magnets. In the current process, the metallurgic approach melts the cobalt and samarium ores in the correct proportions, but must perform the work in a vacuum to prevent oxidation, increasing the cost of the process. Northeastern's technique instead dissolves cobalt and samarium salts in the correct proportions in a high-temperature solvent. That induces magnet nanoblades -- tiny dipoles measuring just 10x100 nanometers -- to form and drop to the bottom of the solution. An oxidation-preventing coating of polyvinylpyrrolidone is then applied to the nanoblades, resulting in a black magnetic powder that can be formed into powerful magnets in the presence of a strong magnetic field. Other techniques for creating supermagnets composed of nanoblade dipoles have succeeded for high operating temperatures, but the rare earth magnets performed poorly at start-up when the magnets operated at room temperature. However, Northeastern University researchers claim their formulation performs well both at room temperature and at very high operating temperatures, thereby permitting applications such as smaller motors with the same performance as larger engines. -END- | |
| August 01, 2008 MIT splits water with sunlight Publisher: The Chemical Engineer, London, UK Author: Claudia Flavell-White | |
| SPLITTING WATER INTO hydrogen and oxygen at room temperature using solar power, under benign conditions and without the need for expensive catalysts: it's the holy grail of the hydrogen economy. Now, researchers at the MIT claim they found it. Writing in the 31 July issue of Science, MIT chemistry professor Daniel Nocera and postdoctoral fellow Matthew Kanan say they have developed a practical way of generating plentiful supplies of hydrogen gas to power cars, houses etc. Their discovery hinges on a novel cobalt/phosphate catalyst that forms a film on the anode which in turn cleaves the oxygen from water when a current runs through it. A conventional platinum catalyst produces hydrogen at the cathode. The process works at room temperature, uses water at neutral pH, and is easy to set up, raising hopes that it will be straightforward to develop and scale up, and hopefully economic to run at large scale. The researchers are still working to understand the exact mechanism of catalysis at the anode. They know that cobalt ions and phosphate ions were observed to form a thin dark film on the indium tin oxide anode, and that it was this film that appeared to act as the catalyst -- but whether it is Co3+ or Co4+ ions that eventually pull electrons from water to leave behind oxygen atoms and H+ protons is still not entirely certain. However, they have observed that the cobalt phosphate film catalyst appears to regenerate itself, which would make it infinitely more practical for everyday commercial application. While it is of course already possible to split water into hydrogen and oxygen, current technologies consume vast amounts of power and a lot of expensive platinum to catalyse the process, and operate in a harshly alkaline environment. By contrast, Nocera and Kanan's set-up works on standard water and even appears to tolerate some impurities. Interestingly, their breakthrough is the result of Nocera questioning some basic assumptions of catalysis. Frustrated by his lack of progress, Nocera decided to abandon the usual rule to use very stable catalysts that aren't corroded by the reactions they catalyse. By contrast, the cobalt phosphorous film that acts as catalyst breaks down as soon as the current is cut -- but it reassembles as soon as power is restored. "This is the nirvana of what we've been talking about for years," says Nocera. "Solar power has always been a limited, far-off solution. Now we can seriously think about solar power as unlimited and soon." Other experts concur. James Barber, biochemistry professor and photosynthesis expert at Imperial College London, says: "This is a major discovery with enormous implications for the future prosperity of humankind. The importance of [Nocera and Kanan's] discovery cannot be overstated." Nocera says that in ten years' time, efficient, effective photovoltaic cells could provide all the necessary power for household during the day, using excess energy to generate hydrogen for household fuel cells that would provide power over night. Electricity-by-wire from a central source could be a thing of the past, he believes. Before this happens, plenty of work remains to be done. The efficiency and speed of the oxygen-production has to be speeded up. Then the whole arrangement needs to be connected to an energy source -- preferably wind or solar -- on one end and an electricity-producing fuel cell on the other. Finally, scientists hope to find an alternative for platinum both at the cathode and to catalyse the reverse reaction of hydrogen and oxygen into water: with platinum costing over $2000 per troy ounce, a cheaper replacement would go a long way to making both the water reactor and the fuel cell affordable at scale. The solution to at least the second half of this final challenge may be closer at hand than thought: a materials scientists in Australia says that a combination of poly(3,4-ethylenedioxythiophene) (PEDOT) and Gore-tex -- a polymer widely used for water-repellent outdoor and sports clothing -- could replace platinum as the fuel cell catalyst of choice. PEDOT is a conducting polymer which, coated onto a Gore-tex membrane, is just as effective as a fuel cell catalyst as platinum. And unlike platinum, the polymer catalyst is not subject to carbon monoxide poisoning, which can occur in platinum-catalysed fuel cells. Doug MacFarlane, professor of chemistry at the Australian Centre for Electromaterials Science, says: "The cost of the platinum component alone of current fuel cells for a small car with a 100kW electric engine is more than the total cost of an 100kW gasoline engine. Also current annual world production of platinum is only sufficient for about 3 million 100kW vehicles, less than one-twentieth of the current annual global production of vehicles." In other words, if we ever want to replace conventional cars with fuel cell models, finding an alternative to the platinum catalyst is a must. -END- | |
| July 28, 2008 Cobalt Typifies The Bull Market Publisher: minesite Author: Rob Davies | |
| Cobalt is one of those metals that everyone is familiar with in a vague sort of way. Most are dimly aware that is probably used in high technology applications, but would struggle to name a primary cobalt mine or producer. And as for so many speciality metals, the cobalt market is actually quite a small market. Metals consultancy CRU estimates that the total market in 2007 was for only 60,000 tonnes. But that demand is surprisingly widespread. One third of consumption goes into what is deemed environmental applications, such as solar panels and fuel cells. A bit more, about 36 per cent, is used for industrial applications such as drill bits and ball bearings. Surprisingly turbine blades and jet engines only accounts for 22 per cent of cobalt use. The remaining nine per cent is consumed in the electronics industry in things such as hard drives, memory chips and cell phones. That is a pretty widespread range of uses in what can loosely be called technological applications. Beyond that, cobalt is being tested for use in products such as lithium ion batteries and hydrogen storage systems. If the world is going to continue increasing its use of technology then it is hard not to believe that cobalt has a big future ahead of it. That's why consumption of this metal is expected to rise to 75,000 tonnes by 2010 and to 100,000 tonnes by 2012. In mining terms those dates are not very far away. So who will supply this metal? Formation Capital is building an integrated mine and processing facility in Idaho with a total contained cobalt resource of 13 million pounds or nearly 6,000 tonnes.[*] Formation clearly hopes to be part of the equation. Right now supply comes from a variety of sources, mostly as by-product of nickel and copper mining, though there is one primary mine in Morocco and one in the US. Much will come out of the Congolese copperbelt, mostly as by-product. But the Cobalt Development Institute, a not-for-profit industry body designed to promote cobalt, estimates that these various sources generated about 53,000 tonnes of refined cobalt in 2007. That leaves a pretty big gap between what is currently produced and what will be needed in two years time. Not only will be the demand for cobalt be rising sharply, but the demand for the highest level of purity, 99.999%, is forecast to rise even more rapidly. Only about 5,500 tonnes of out of total cobalt metal production of about 23,000 tonnes is suitable for critical superalloy applications. It's estimated that the industry needs to provide another 1,000 tonnes a year of high purity cobalt to match demand. Only two companies today provide this high quality material, Vale and Xstrata, the new owners of the two Canadian nickel miners Inco and LionOre. More supply will be provided as by-products from new mines in places like the Democratic Republic of Congo. But there is substantial risk to these, especially in terms of timing. Although US$40 a pound might look expensive now, if these projections are right, then US$40 could look like a bargain in a few years time. There may be some speculation in some precious and base metals, but cobalt is so specialised that it would be difficult for traders to build up a large position in this metal. This fundamental situation suggests that, despite what some pundits are saying, the end of the commodity boom for this metal is not in sight just yet. -END- * Formation Capital notes that the reported resources in its NI 43-101 compliant Technical Report for the Idaho Cobalt Project utilizing a 0.2% cut-off amount to 37.3 million pounds of cobalt in a measured and indicated categorty and 13.1 million pounds of cobalt in the Inferred category. | |
| July 24, 2008 4 Commodities Ready to Shock Investors - #4 Demand Surging, Supply Uncertain for Cobalt Publisher: Energytechstocks.com Author: Energytechstocks.com | |
| As if the oil price shock that has thrown the world into turmoil isn't bad enough, there's reason to believe at least four more commodity price shocks may be headed straight for investors' portfolios. Last up: cobalt, a commodity that attracts surprisingly little media attention, given how uncertain its supply is in the face of surging demand. Like water, cobalt isn't traded on an exchange. But the effects of its surging prices can be felt everywhere. Cobalt is found in cell phones, laptops and car batteries. It's also an essential component of artificial joints in people. While the price of cobalt is up nearly 60% over the last 12 months, and now reportedly stands at a 30-year high, an even greater price shock could occur at any moment. That's because, as recently noted on the web site of the respected magazine Foreign Policy, half of all cobalt reserves are in the "volatile" Democratic Republic of Congo. The unsettled state of the country's mining contracts with foreign firms including BHP Billiton Ltd. and Freeport-McMorRan Copper & Gold Inc. presumably could lead to work slowdowns or shutdowns at any time. The government wants them renegotiated, having found the contracts to be unfair to the state. Last week Bloomberg News reported that former U.S. President Jimmy Carter's human rights organization is opposed to any renegotiation unless the rights of miners are taken into greater consideration, further muddying the outlook. Meanwhile, demand for cobalt continues to surge, with "tech-hungry China's cobalt consumption expected to climb at least 7%" per year through 2009, according to Foreign Policy. The takeaway for investors here is that some companies might possibly do well with their cobalt recycling technology. Mitsui Mining & Smelting Co. Ltd. and Sumitomo Metal Mining Co. Ltd., both of which trade in Tokyo, reportedly have developed technology that can recover nearly all of the cobalt in nickel metal-hydride (NiMH) batteries. #1: Coal's Fundamentals 'May Be Stronger Than Oil's' #2: Water Costs To Surge On Regulations, Infrastructure #3: A War In Africa May Cause Phosphate Energytechstocks.com -End- | |
| July 24, 2008 The hi-tech metal that could save the airline industry Publisher: Moneyweek.com Author: Chris Mayer | |
| In investing, the prospect of crisis has always been a sort of summons for me. It's like when I was a little boy and the ice cream truck's jingle sent me running for loose change on a hot summer day. These days, I'm just trying to get at goodies of a different sort -- profitable investment ideas, instead of ice cream bars. And today's aviation industry has a big crisis on its hands. As a percentage of airline costs, fuel is now about 35% of the total -- up from only 13% at the start of the decade. It is the airline industry's No. 1 expense. The cost of fuel puts enormous pressure on the industry. At the same time, regulators are pushing for cleaner planes with fewer emissions. "The price of oil has challenged and changed all realities for the aviation industry," says Tim Clark president of Emirates, a Dubai-based carrier. "This is the greatest crisis in aviation's history -- bigger than the Gulf wars, Sept. 11, SARS and past oil shocks." If oil prices stay where they are and nothing else changes, the airline industry will lose about $6 billion this year, compared with a profit of $5.6 billion last year. Many airlines will be taking that familiar stroll into the bankruptcy courts. Globally, 24 airlines have already filed in just last the seven months. The industry is trying -- and will try -- lots of different tactics to fend off elimination. One of these is to push for more fuel-efficient aircraft. And that is the opportunity for investors to cash in on this crisis. It starts with the jet engine. Today's Wall Street Journal published "Jet Engine Makers Launch New War" -- all about the drive for new fuel-efficient engines. The piece notes that airlines worldwide want to replace their existing fleets with next-generation planes, not the current oil-guzzling models. The goal of the jet engine makers -- or rather, the mandate put to them by their customers -- is to deliver at least double-digit gains in fuel-efficiency. As the WSJ reports: "Developing fuel-efficient engines requires the use of exotic alloys and ceramic coatings that can cope with internal engine temperatures that would be above the melting points of untreated metal components." Enter cobalt. It's a tough metal with a high melting point of 2,700 degrees Fahrenheit. This higher melting point allows it to maintain its strength at higher temperatures than other metals can. Cobalt alloys have higher melting points than either nickel or iron alloys. As a result, one of the main uses of cobalt is in superalloys such as those that jet engine makers need. In fact, the making of superalloys consumed about a quarter of global cobalt production, of which about 75% wound up in aircraft. Cobalt would seem to have a nice backdrop of long-term demand. But it doesn't stop there. Defense spending is also on the rise globally. A Financial Times report on aerospace notes that India, China, Brazil and certain Middle Eastern countries are all upping their defense spending. India alone may spend $40 billion in 2009. Cobalt is an important part of all that, too. In fact, the U.S. and the Soviet Union used to stockpile cobalt for defense purposes. Those stockpiles are long gone, but the role cobalt plays in defense still exists. As exciting as the aerospace angle is, a potentially bigger market could be batteries for hybrid cars. As I pointed out in the last issue, there are 5-10 pounds of cobalt in a typical hybrid car battery. Hybrid car sales will probably hit 500,000 cars this year. And that is growing rapidly. Kitco recently noted that cobalt holds an electric charge better than almost any other metal. That makes it hard to replace, even at $50 per pound. "And the current electric batteries work so well," Kitco notes, "[that] there is little incentive to change their structure (and other metal prices have skyrocketed, as well as cobalt -- nothing is cheap anymore)." With the failure of banks and the troubles of big financials such as Fannie Mae, cobalt seems a nice place to be. A while ago, I recommended a "cobalt play" to the readers of my investment service, Mayer's Special Situations. The name of the stocks is OM Group (NYSE: OMG). I should warn you that the stock is a bit speculative. But let me share a few of the particulars... OMG carries a seemingly absurd valuation. It's not often that you find profitable and growing companies with no net debt trading for big discounts to book value. The specialty chemical industry -- a tribe to which OMG belongs -- is undergoing heavy consolidation. Companies are getting bought out left and right. Dow Chemical bought Rohm and Haas for a 74% premium. And then Ashland came along and bought Hercules for a 38% premium. Companies that make low-margin chemicals are looking to beef up on companies that make high-margin, or specialty, chemicals. Because OMG is cheap and very profitable, it has to be on someone's radar. I hope that it doesn't get bought out. I think we'll do better holding the stock. But the deal-happy scene in the chemical business is another potential backstop of value here. Hard to believe that anyone could buy all of OMG for anything less than at least book -- which is $36 per share. And even that would bring howls of protest. After all, the stock was in the $50s for much of the past year. We will see. In any event, let's bring this back around to the aviation crisis. A familiar theme in the pages of my letters over the years has been this Templetonian notion of focusing on the opportunities that problems present. The late great John Templeton made this idea a key component of his investment -- and life -- philosophy. The high price of oil is a big problem for many industries. So if you have a good way to mitigate the high price of oil, you have a business. I think the big winners over the next few years are going to be those companies that have a solution to the high price of oil. Those companies have products that other people will pay up for, because fuel-efficiency is a must. The aerospace industry must become more fuel-efficient. Cobalt alloys will be a big part of that trend. This article was written by Chris Mayer for Whiskey and Gunpowder -END- | |
| July 17, 2008 Cobalt prices soften over summer, but bullish trader sees $150/lb possible next year Publisher: Metal-Pages | |
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- For the Information of Shareholders and Interested Parties Only - Dear Shareholder/Interested Party, Below find an article by Metal Pages regading the price of cobalt and future price projections: Cobalt falls to 9-month low LONDON (Metal-Pages) 17-July-08. The cobalt market has fallen to a nine-month low, trading at its lowest since November 2007, with market players saying they expect the price to fall further in the next few months. The price for high grade material was quoted at a range of $ 38-40/lb and Russian material was quoted at $ 35-37/lb. BHP Billiton lowered its screen offer price this morning by $ 2/lb to $ 40/lb and Norislk Nickel also lowered its inidcative price for 99.3% cobalt today to $ 37.50/lb down $ 1.5/lb from $ 39/lb. Traders reported that the cobalt market was trading at a $ 5/lb backwardation over the next three to six months. A UK trader said: "The market is in a fairly stiff backwardation - there is business going on in ever decreasing numbers and the theme continues with the prices moving down and I think they are going to move down further. People are trying to find buyers, BHP is looking to sell, but consumers are waiting until they need metal. There is no weakness in demand, it's just that consumers are not going to buy until the price is lower still." However, a more bullish trader said that while he anticipated further falls in the cobalt price in the next month, he expected the market to rally in September. "The lower it goes the bigger the bounce, I wouldn't be surprised to see the price at $ 150/lb next year - I think it will catch everyone by surprise," he said. He noted that Airbus has commissioned 40 billion dollars worth of aircraft over the next five years and that next year there will be demand for 5,000 tons of cobalt for hybrid cars. -END_ | |
| June 25, 2008 Cobalt prices are easing back toward $40/lb Publisher: Purchasing.com Author: Tom Stundza | |
| Domestic cobalt prices have declined 13% since the peak in March and some analysts believe they will slide further off the $45.50/lb average in June determined by Purchasingdata.com in a survey of buyers. The metal has averaged almost $49/lb in the first half of this year, compared with $30 in 2007 and $17 in 2006. Platts Metals Week's assessment for 99.8% cathode imports into the U.S. in the near futures has fallen to $44/lb for Zambian material and $43.50 for Russian and Australian metal. The near-future price from China, the largest foreign supplier, also is being reported as low as $40---a price last posted in December 2007---because of excess supply for world demand, which is highlighted by lagging 2008 demand in industrialized nations, including the U.S. Cobalt is used to make superalloys, chemical compounds for a variety of applications, cemented carbides and diamond tools, magnetic alloys and specialty steels and metallic alloys. The analysts say buyers are in no rush to buy cobalt while prices appeared to be falling. And traders interviewed by Platts still are seeing consumers coming in for small volumes on a hand-to-mouth basis. MetalBulletin.com, a subscription website, agrees that cobalt prices will drift down this summer in what it calls thin trading as consumers anticipate even lower prices in the weeks ahead. Looking ahead, some analysts see a pickup in pricing after Labor Day when hybrid car battery manufacture perks up after summertime vacations end. There are anywhere from 5 to 18 pounds of cobalt in every hybrid car battery. Even at 10 pounds cobalt per car, if the market did triple to 1.5 million units that would make 15 million new pounds of cobalt needed annually -- a substantial increase in a small 120-million-pound market. -END- | |
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