| December 13, 2007 Cobalt driven to new record high by strong demand Publisher: Reuters Author: Reporting by Pratima Desai; Editing by Michael Roddy | |
| 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. -END- | |
| November 29, 2007 BHP Billiton Sells Cobalt at a Record $37.75 a Pound Publisher: Bloomberg Author: Chanyaporn Chanjaroen | |
| BHP Billiton Ltd., the world's largest miner, sold cobalt for a record $37.75 a pound on expanding demand for the metal used in rechargeable batteries. The Melbourne-based company sold 5 metric tons for December delivery to Europe, it said today on its cobalt sales Web site. BHP is offering 5 tons at $39.75 a pound for December delivery. Yesterday, the company sold 5 tons for November delivery at $36.75 a pound to North America. "Demand is fairly strong, especially from China," said Calum Baker, research manager in steel raw materials at metals consultant CRU in London. "There has been an expectation of a supply shortfall in Congo.'' The metal has advanced more than 38 percent this year, with demand expected to expand 6 percent in 2007 and 5 percent in 2008, according to CRU. The advance has spurred takeovers in the cobalt-mining industry, including a $2 billion bid by Katanga Mining Ltd. for Nikanor Ltd. this month. The two combined would become the world's largest cobalt producer by 2011. -END- | |
| November 27, 2007 Cobalt, magnesium and bulk alloys lead the markets - November 2007 Publisher: Metal Pages | |
| Cobalt has been riding high over the past month where many other markets failed to pick up after a slowdown in the third quarter. The weak dollar had some part to play in this, with UK traders reporting both an increase in enquiries and requests by sellers to be paid in sterling. Having topped $30/lb in mid-October the market continued moving steadily upward towards $35/lb, buoyed by both a shortage of material available in the spot market and bullish sentiment, which has seen investors start taking positions in the market. The London Metal Exchange is also, once again, turning its eye to cobalt to determine whether it, along with other minor metals, could feasibly trade on the exchange. There are mixed feelings on whether the minor metal markets are liquid enough and would be open to the kind of transparency that the LME requires. A poll by Metal-Pages, however, came out with a surprisingly balanced result, with a small majority of those responding happy to see their metal trade on the LME. Having opened a market in cobalt futures to investors in September, Credit Suisse said the market has been even more successful than expected. This, and the fact that cobalt is already sold on open online systems by producers, makes this metal probably the most obvious candidate for trading on the exchange. At the moment, producer stocks are said to be either sold out or running low and a small volume of five to ten tonnes is enough to move the market. On their online trading systems, BHP-Billiton and Norilsk Nickel have been leading the way by repeatedly increasing offer prices with every sale. BHP-Billiton moved its offer price up to $35.50/lb on November 21, having reported a five-tonne sale to North America at $34.75, the highest transaction price ever recorded on its website, while Norilsk Nickel raised its website offer price up to $33/lb on November 22. Previous to that BHP-Billiton had raised its offer price on 16 November, for the second time in two days, to $33.30/lb on the back of a five-tonne sale. Norilsk Nickel had moved its offer price, first to $31.20/lb on 14 November and then to $32/lb on 19 November, basis in warehouse Rotterdam. In China, Jinchuan Group also lifted its price for 99.8% cobalt metal on 20 November to Rmb578,000/tonne, up from the previous Rmb566,000/tonne basis which has been in place since 9 November. Not everyone is happy with the rising market. Said one major western consumer/processor: "The market is clearly the hostage of an incredible sense of opportunism... With each quote the Russians move up their price and we have another hit or two on BHP... It is not always easy to beat the bulls. We still believe that the hike is on the basis of speculation and not fundamentals, but the end result is unfortunately the same." He put the market, in the penultimate week of November, for 99.3% at $32-33/lb and for 99.8% at $33-34.50/lb, against a more general market range of $33-33.75/lb for 99.3% and $34-35 for high grade. Previously, the price of cobalt, has topped $30 per lb just three times since the mid-1990s: March, 2007, January 2004 and February 1996. There are now enquiries for 2008 and demand is also said to be boosted by consumption in China, particularly for making batteries. In China prices for all cobalt products are rising, as availability of raw materials gets tighter. Concentrate prices are now quoted at $28-29/lb. Some producers are said to have halted production and have started to trade raw materials as they have difficulties raising the cash. Prices towards the end of November went up to about Rmb630-640/kg ($38.6-39.2/lb) for 99.8% cobalt metal, some Rmb450/kg (US$27.6/lb) for 72% min Co cobalt oxide, while offer prices for industrial chemical cobalt oxalate, used in manufacturing automotive tyres have also gone up, to Rmb190,000-Rmb195,000 (as high as $26,351/tonne) for 31% min cobalt oxalate. Cobalt has a wide variety of applications in industrial chemicals, batteries, aerospace alloys, land-based turbines and power generators. It is likely to see a growing demand in hybrid vehicles, as the automotive industry strives to be cleaner but still affordable. Japanese car manufacturer Daihatsu Motor Co recently unveiled its new fuel cell technology that eliminates the need for platinum in electrode catalysts. By changing from acidic to alkaline electrolyte membranes it can replace the costly metal with cheaper and less corrosion resistant metals such as cobalt or nickel. Note: The article continues on to discuss other commodities. For a complete copy of the article the reader is referred to Metal Pages November Newsletter located at www.metal-pages.com | |
| November 23, 2007 Cobalt nears record $35 per lb Publisher: Reuters Author: Daniel Magnowski | |
| LONDON, Nov 23 (Reuters) - Miner BHP Billiton (BLT.L: Quote, Profile, Research) sold cobalt at a record $34.75 per lb this week and on Friday offered the hi-tech metal at $35.50 per lb, with traders saying that free market prices were poised to rise towards $40. Cobalt (COB-CATH-LON: Quote, Profile, Research) has risen more than 25 percent since the start of the year and is now at its highest in dollar terms in more than 20 years, dealers said. The most expensive sale recorded on the BHP website is $34.75. "When BHP gets booked again it will go to $36 and higher, but it will do it stage by stage," a British dealer said. "It's sustained because it's based on fundamentals. Buyers are looking for long-term contracts for next year but there aren't going to be enough cobalt units around," he said. Many in the market predict that demand will outstrip supply next year as engineering firms use more metal in batteries and aircraft components. New sources of supply, from the Democratic Republic of Congo in particular, may face delays in reaching full production. Russian mining firm Norilsk Nickel had lower-grade metal (COB-ING-LON: Quote, Profile, Research) on sale at $33 per lb, and another trader said metal was changing hands on the spot market between this level and $34 per lb. In other minor metals, steelmaking additive ferro-molybdenum (MLY-FERRO-LON: Quote, Profile, Research) traded slightly lower at $74-75 per kg for Western-grade material delivered in Europe, down from $74.50-75.50 last week, while Chinese-origin (MLY-F60-LON: Quote, Profile, Research) was sold at around $72 per kg, merchants said. Ferro-tungsten (TUN-FERRO-LON: Quote, Profile, Research) slipped fractionally to $33-33.50 per kg and ferro-vanadium (VAN-FERRO-LON: Quote, Profile, Research) lost around $1 to $36.50-37.50 per kg. Dealers reported little spot business as consumers were more interested in long-term deals for 2008. "It's quiet because nobody's buying for December delivery, instead they are talking about next year," a European alloys dealer said. Many long-term contracts use published metals prices as the basis of pricing formulae applied for the duration of the deal. On Thursday, alloys and minor metals trading firm Wogen (WGN.L: Quote, Profile, Research) said preliminary results for its full year would be ahead of market expectations. [ID:nWLB3514] Johnson Matthey (JMAT.L: Quote, Profile, Research) said this week it was considering building an auto catalyst plant in Macedonia. [ID:nL22276278] (Reporting by Daniel Magnowski, editing by Peter Blackburn) Reuters, 2007 -END- | |
| November 16, 2007 Credit Suisse successfully establishes market in cobalt Publisher: Metal-Pages | |
| LONDON (Metal-Pages) 16-Nov-07. Credit Suisse has said that its hedging market in cobalt metal opened to investors in September this year has been more successful than expected. Kamal Naqvi, Head of Hedge Fund Coverage in the Commodities group at Credit Suisse said that Credit Suisse had been trading cobalt in reasonable volumes and that a number of trades had been conducted by producers and consumers as well as some private investors. However, he declined to comment on the exact volume of cobalt that had been traded. Naqvi said that in the absence of a futures market for cobalt, Credit Suisse has created the opportunity for clients and corporate investors to take exposure to cobalt and offer them a cash settled swap against the actual average of a particular period. Since cobalt is not traded on any of the world's metal exchanges, the contract is priced against Metal Bulletin's twice weekly settlement price which is the industry benchmark. Credit Suisse set up its cobalt futures trading in response to concern from investors about the level of intraday volatility in the LME base metals markets due to the US dollar and the equity markets. It was also responding growing demand from investors to look at a wide range of commodities. Naqvi said that he did not believe that the financially settled cobalt swaps directly affected the price of physically-traded cobalt but accepted that its introduction had become a popular point of discussion in the industry. He also said he remained bullish about the market due to supply disruptions in the Congo, coupled with robust demand. The bullish sentiment and investment funds' involvement in cobalt have been cited as one of the factors propelling cobalt prices to their current levels. As well as a perceived fundamental shortage and the fact that supply is now consolidated in the hands of a small number of producers and trading houses, the introduction of cobalt futures hedging is actually said to be boosting the upward momentum in prices which reflects on the physical market. Prices edged higher late this week on the back of bullish sentiment with traders quoting prices between $31.45-32.30/lb for high grade (99.8% Co) material and in the range of $30.50-31.50/lb for Russian grade metal. Producers website offer prices also went up, with BHP-Billiton raising its price to $32.80/lb yesterday on the back of a small 5 tonne sale to North America on 15 November at $32.30/lb. The company hiked its online price again today to $33.30/lb offering 5 tonnes, after making a further 5-tonne North American sale, this time at $32.70/lb. Norilsk Nickel lifted its offer price to $31.20/lb on November 14, also reflecting the strengthening market. The Russian producer sold 22 tonnes, in five transactions to four consumers last week, at an average price of $30.41/lb. -END- | |
| November 13, 2007 Norilsk moves up price as cobalt breaches $40 Publisher: Metal Pages | |
| LONDON (Metal-Pages) 13-Dec-07. The Russian producer Norilsk Nickel moved up its cobalt website price to $38/lb today, as trade sources acknowledge that high grade has finally hit $40. BHP-Billiton has yet to make a sale since 7 December ($39.75) but its offer price remains firm at $43/lb for December delivery, reflecting the belief that if consumers want the metal, they're going to have to pay a premium for it. A major UK-based trader reported a 5 tonne sale of Falconbridge for January delivery yesterday, at $40.50/lb, demonstrating that nearby resistance to $40 has been broken. Even the more bearish observers concede that the market for high grade is now at $40. Said one European trader: "I haven't sold at that level yet -- my highest price for 99.8% is $39.75 -- but the market is now at $40. A lot of consumers still need to buy metal. With cobalt production costs at just $8-9/lb a $40 price isn't logical -- but there is no business for logic in this market. Price could continue firm throughout next year." This is an opinion shared by more than a few, who can see no end to the cobalt bull run. -END- | |
| October 11, 2007 Cobalt continues to firm Publisher: Metal-Pages.com | |
| LONDON (Metal-Pages) 11-Oct-07. The cobalt market continued to firm this week, with both BHP-Billiton and Norilsk Nickel moving up their website offer prices to $30 plus. BHP-Billiton has made three sales this week at $29.90/lb and, subsequently, edged its offer price up to $30.25, just above psychological $30 mark. Russian producer Norilsk Nickel increased its 99.3%-graded cobalt offer price to $30/lb, having sold 30.5 tonnes of material in five transactions to four customers at an average price of $30.29/lb last week. It is 99.3% metal which is the most actively traded, and European traders say the bottom of this market is firmly at $29.50. The more bullish put the market for 99.3% at $29.75-30.50, with 99.8% at $30-30.50. The margin between the two is diminishing all the time, as 99.3% grades sets the pace. Another indicator of prices this week was the United States Defense Logistics Agency (DLA), which put 52,862.49 pounds of surplus cobalt up for tender Wednesday. European traders said offers were made in the mid to high $29s. Supported by booming demand and the added prospect of a Credit Suisse cobalt contract, prices are unlikely to take a dip in the near term. -END- | |
| October 08, 2007 Hedge funds eye minor metals Publisher: Reuters Author: Daniel Magnowski - Analysis | |
| LONDON (Reuters) - For years the preserve of globe-trotting merchants and secretive financiers, the trade in rare and valuable minerals known as minor metals is now on the radar of hedge funds searching for profits. Huge amounts of money have been ploughed into higher-profile commodities such as copper and oil since the start of the decade, but the outlook for less well-known metals is fundamentally very strong, traders and fund managers say. Cobalt, a metal mined in countries including the Democratic Republic of Congo, Zambia and Russia for use in aerospace engineering and in power station components is increasingly popular. Nick French, a cobalt dealer at London trading firm SFP Metals, said cobalt is attracting a lot of attention from the investment community. "This year there has been hedge fund interest, the logic being that if you can push the price of cobalt up to $40 per lb from $20, then the share price of a cobalt mining company will double," French said. High-grade metal (COB-CATH-LON: Quote, Profile, Research) is trading around $30 per lb, up only slightly from the start of the year but more than 60 percent higher than its price in October 2006. Investment bank Credit Suisse (CSGN.VX: Quote, Profile, Research) predicts it could cost $40 by the end of the year. The bank itself broke into the market this year when it launched a financially-settled cobalt contract. "The Credit Suisse contract is backed by its alliance with Glencore, so between them they have the financial clout, the physical backing and the necessary market intelligence," French said. "In theory, it gives the market a whole new layer of liquidity, and opens up the market to people who wouldn't otherwise be able to use it by overcoming the problems of lack of liquidity and lack of transparency." There are also plans afoot at the London Metal Exchange (LME) to examine the possibility of a futures contract for cobalt, which could theoretically make it as easy to invest in the minor metal as it is to invest in copper (MCU3: Quote, Profile, Research), one of the most popular assets in this decade's commodities boom. "In cobalt and molybdenum, we do have interest," LME Chief Executive Martin Abbott said. "There has been contact from members of the minor metals trade ... which was on the positive side. We will do some proper research in the first few months of next year." Though cobalt is one of the highest-profile of the so-called minor metals, it's not the only one to draw the eyes of hedge funds. Mark Mobius, head of Templeton Emerging Markets (TEM.L: Quote, Profile, Research), said his firm had price targets for several minor metals. "Generally we are optimistic that metals like antimony, bismuth, molybdenum and others will remain high and could even go higher." Bismuth (BIS-LON: Quote, Profile, Research) prices have doubled this year, while antimony (ANT-HG-LON: Quote, Profile, Research), used to make plastics and fibers fireproof, is trading around 13-year highs as China, which supplies around 90 percent of the world's metal, shifts to being both a producer and consumer rather than just a source of metal. CHINESE RESERVES? Chinese domestic use of the metals it in the past exported in greater quantity to processors and end users in Europe and the United States, will continue to be a major theme in the minor metals markets. Beijing imposed export quotas on indium and molybdenum in June and is believed to speeding up a scheme to build up a national reserve of minor metals including indium, a key material for flat-screen TVs, in order to support domestic hi-tech industries. "The reserve will come sooner or later, I believe the quota is just the first step," said a trading manager at a smelter in China's Liaoning province. Feng Juncong, analyst at state-run research agency Antaike, said building reserves could mean higher prices for metals such as indium. "The government wants to support its flat panel TV industry, whose development is facing a bottleneck as the country's indium processing industry is quite weak," Feng said. "I think a title of national reserve will raise the metal's profile and there will be more policies to encourage Chinese indium high-end production." A senior official at the Mines and Metals department of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters said the government had started discussing reserve-building with major producers. "It has not yet entered into a practical period, but it is an urgent issue," he said. "It is easy to understand -- China is in the middle of its industrialization and needs plenty of resources." -END- | |
| September 26, 2007 Cobalt forward deals breach $30, nearby also firms Publisher: Metal Bulletin Ltd | |
| London 26 September 2007 15:21 - Cobalt sales for next year have breached $30 a lb, evidence of growing tightness in the market, observers said. A series of trades In the early part of 2008 have already been agreed for both high-grade and low-grade metal at above $30. Additionally, Credit Suisse/Glencore have completed a paper deal to a hedge fund above $30 to be settled against the December average, MB understands, as part of some 300 tonnes' worth of cobalt futures that have already been agreed. "It's symbolic," said a London trader. "We're close to bursting the skin on the pudding." Although spot deals have slowed, prices have yet to weaken, and the market remains in a healthy contango, participants said. "The market seems very strong, there are no numbers below $28," said a second London trader. "There are no signs of weakness, no-one is undercutting the market." Low grade cobalt rose to $28.25-29 from $27.75-29 although high grade was steady at $29-29.75. Demand from the superalloys sector is high and the recent conclusion by major European consumer Umicore of fourth quarter deliveries at less favourable terms to it than in the third quarter shows the battery sector is strong, traders said. On the supply side, output remains under pressure with Xstrata's Nikkelverk refinery still producing below par - output fell 24 percent in the first half of the year to 1,920 tonnes due to reduced feed while Chambishi Metals continues to suffer quality problems following an outage earlier this year. Concerns regarding stability in the Democratic Republic of Congo will also underpin the market, traders said. Still, business is thinner than in recent weeks, and Norilsk's acknowledgement on its website it sold at $27.53 per lb last week, down from $27.65 the previous week, could indicate weakness to come, a buyer said. Copyright (c) Metal Bulletin Ltd. All rights reserved. | |
| September 20, 2007 China to become the world's biggest buyer of aircraft over the next 20 years Publisher: Excerpt from The Gartman Letter Author: Donald Berman | |
| As reported in "The China People's Daily" regarding China's appetite for aircraft going forward: As China leaps into the 21st century, she will be the biggest buyer of aircraft and engines over the next 20 years. This is not a forecast from Beijing; this is a forecast from Rolls-Royce, the maker of so many of the jet engines these aircraft will be powered by. With passenger traffic growing at 8.8% per year, Chinese airlines need to buy over 3,100 new aircraft and therefore 6,600 engines worth over $65 billion, according to Rolls-Royce. We are talking several tens of billions of dollars annually in the engine arena alone over the next decade. Further, the Asia-Pacific market should take as many as 26,000 new engines over the two decades. These are not inexpensive pieces of equipment, and Rolls-Royce believes that Asia is, and will be, the key market for new aircraft with engines... and Asia will take them regardless of the Renminbi's value. -End of Excerpt- | |
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