“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...