Cobalt Market Update (January 23, 2013)

Battery Metals

A brief overview of cobalt price developments, supply and demand and significant market movers.

Metal-Pages reported that western cobalt prices are being buoyed by expectations of stronger demand from the aerospace sector and fewer cheap sellers in the market.

Mixed opinions persist, however, about how strong and long-lived a potential price rally may be.

Cobalt 99.3-percent and 99.6-percent grades were up slightly last week to $11.25 to $11.75 per pound. Both the metals had been quoted in the $10.20-per-pound range through December 2012.

Aerospace-grade 99.8-percent material is running at $11.70 to $12.70 per pound, though Metal-Pages notes that numbers as high as $13 per pound are being discussed. EU prices were below $11 per pound at the outset of 2013.

Ongoing investigations into recent fires on two Boeing 787 Dreamliners have focused lately on the aircrafts’ lithium-cobalt batteries, which have been noted to be at incendiary risk when overcharged. The batteries were found burned, but investigators are still determining whether they themselves were the cause of the fires, The Guardian reported on Monday.

London’s CRU Group sees prices of both low- and high-grade cobalt metal settling over the next two years. CRU is looking for 99.3-percent grade to average $12.50 per pound this year and $12 per pound during 2014. The firm sees 99.8-percent grade running $13.50 and $13 per pound for the respective next two years.

At the same time, the UK’s Darton Commodities said in its 2012 to 2013 cobalt market review this month that prices could reach as high as $16 per pound for the coming year, according to Platts.

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