COBALT INSTITUTE CONF 2018: LME cash-settled, physically-delivered cobalt contracts will run in parallel – Chamberlain

The London Metal Exchange’s new cash-settled cobalt contract will run alongside the existing physically-delivered contract at first, and it may prove sustainable to run the two in parallel going forward, the bourse’s chief executive officer said.

“There are people who have been supportive of the physical contract. After the summer, we will engage with users to see if they want to continue with the physically-settled contract, which is what we currently hear,” Matthew Chamberlain said at the Cobalt Institute conference in Las Vegas on Thursday May 24.  While two contracts risks a split in liquidity, that risk could be outweighed by arbitrage opportunities between the two, he said. “We are open minded but we think we need to see how the market responds to the new contract rather than simply saying we will scrap the existing contract,” delegates heard. The LME launched a physically-delivered cobalt contract in 2010, but it has struggled to build volumes and traction. “Most of you are using...

Published

Charlotte Radford

May 25, 2018

08:29 GMT

Las Vegas