PRICING NOTICE: Proposal to include Norilsk cut cathodes in cobalt price assessments

Fastmarkets proposes to amend the specifications of its benchmark in-warehouse Rotterdam price assessments to incorporate grade-1 and grade-2 Norilsk cut cathodes within its list of accepted cobalt brands.

According to preliminary market feedback, grade-1 and grade-2 cobalt cut cathodes produced by Norilsk are now commonly accepted by consumers of cobalt and are regularly traded in the spot market.

As such, Fastmarkets now proposes to formally consider trades and other market activity as well as indications for this material within its benchmark in-warehouse Rotterdam price assessment for standard-grade cobalt.

This proposal takes account of preliminary market feedback Fastmarkets received. Norilsk cut cathodes were first nominated for inclusion in Fastmarkets’ cobalt price assessments in January 2018 as part of a broader review of its cobalt price discovery. Data relating to sales and market activity of Norilsk cut cathodes was formally logged from February to April 2018, though not considered as part of the price assessments published during that three-month window.

During that time, the collected data showed that Norilsk cut cathodes were scarcely traded in the spot market. Data also showed the greatest deviation from the day’s average price for other brands considered by Fastmarkets over the trial period. More recent conversations suggest neither of those concerns are still prevalent, making Norilsk cut cathodes a good candidate for inclusion within the benchmark price assessment.

According to preliminary market feedback, Fastmarkets intends to take account of the Norilsk cut cathodes produced since the beginning of 2019.

Note that data submitted in relation to Norilsk cut cathodes (as with all other data received as part of its price discovery) is considered as part of a reporters’ expert judgment under which outliers are excluded from the price assessment.

The consultation period for the proposed amendments outlined above will end one month from the date of this pricing notice on Thursday May 30.

Subject to feedback, the earliest date these changes would take effect is from Friday May 31.

Fastmarkets is aware that Norilsk cut cathodes have, in some cases, been discussed as appropriate for inclusion in the alloy-grade quote. Fastmarkets intends to seek confirmation from consumers that Norilsk cut cathodes have the same certifications as brands already included in the 'alloy-grade' specification, and in the meantime, will consider market data relating to grade-1 and grade-2 Norilsk cut cathodes within the standard-grade quote. It is possible that the positioning of other brands will change if feedback is received to that effect. Fastmarkets will update the market on the feedback it has received by the end of August, at the very latest, to ensure brand classifications are clear ahead of the bulk of 2020 contract negotiations taking place.

Subject to feedback received in relation to this pricing notice and proposal, from May 30 Fastmarkets specifications for its standard-grade cobalt price assessment will read as follows:

Assessment: Standard-grade cobalt, in-warehouse Rotterdam, $/lb
Quality: Standard-grade cobalt metal, 99.8% minimum cobalt content. Standard production of the following brands: Chambishi broken cathodes, CTT broken cathodes, Katanga cathodes, Minara briquettes, Ambatovy briquettes, Norilsk cut cathodes (grade 1 and grade 2 – production since January 2019),
Min lot size: 1 tonne
Max lot size: 100 tonnes
Location: Rotterdam
Timing: Within 30 days, other terms normalised
Unit: US$ per lb
Form: Broken cathodes, briquettes, cut cathodes, original packaging
Payment terms: Cash; other terms normalised
Publication: Twice weekly. Wednesday and Friday, at 3pm London time

To provide feedback on these proposed amendments, or if you would like to provide price information by becoming a data submitter to Fastmarkets’ cobalt price assessments, please contact Charlotte Radford by email at: pricing@metalbulletin.com. Please add the subject heading FAO: Charlotte Radford, re: amendments to cobalt specifications.

To see all Fastmarkets’ pricing methodology and specification documents go to https://www.metalbulletin.com/prices/pricing-methodology.html

Charlotte Radford

charlotte.radford@fastmarkets.com

Published

Charlotte Radford

April 30, 2019

13:30 GMT

London