Physical market expresses some interest in hedging, trading through Cobalt 27

Suppliers, consumers and end-users of physical cobalt are working out how they could use the investment vehicle Cobalt 27 as a hedging or trading tool.

Cobalt 27, which is backed by Pala Investments, plans to raise C$200 million ($148.5 million) in a listing in Canada to invest in the cobalt market through a combination of streams, royalties and buying physical material – some of which will come from metal-for-equity swaps.
The cobalt market is, at the very least, interested in the potential that Cobalt 27 will have, with some predicting that it could become a tool for hedging.
“Over time, the hedging interest from the industry for this product will: a) exceed the investor interest, which currently is incredibly strong, and b) become a permanent feature of the cobalt industry,” one experienced and significant participant in the physical market told Metal Bulletin.
Initially designed for investors, producers, traders and end-users have expressed interest in getting involved, a banker close to the company confirmed.

“We had not anticipated the interest from the physical market for...

Published

James Heywood

May 31, 2017

06:00 GMT

London