PRICING NOTICE: Proposal to amend specifications of cobalt hydroxide assessments – extension

In light of market feedback, Fastmarkets is amending its proposal to change the specifications of its two cobalt hydroxide price assessments and extending the consultation period by one week to allow for any final feedback.

Per the original specification amendment consultation notice, Fastmarkets proposes to tighten the chemical specification of its two cobalt hydroxide assessments by adding additional requirements on certain key chemical components.

The intention of the chemical specification is to allow for the inclusion of as much relevant market data as possible, while not proving so broad as to produce price ranges that are so wide as to compromise their utility for physical market application or for tracking market trends.

Feedback received so far suggests it would be appropriate to stipulate maximum manganese and magnesium content of 6.5%, rather than 6% as was proposed initially.

Fastmarkets understands that consumers can accept cobalt hydroxide with higher levels of manganese and magnesium, but that such material would typically attract a discount due to the additional cost of removing impurities, or the effect on cobalt yield.

Some feedback has also suggested reducing the minimum cobalt content from 30%. Given the nature of the data received for the two cobalt hydroxide assessments so far, this suggestion is not under consultation for the time being, but we may review the minimum cobalt content at a later date as more data is collected.

In light of the above, the specifications now under consultation are as follows:

Assessment: Cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low-end)
Quality: Units produced from large-scale mining activity, with the following chemical composition: Co 30% min, Mn 6.5% max, Mg 6.5% max, S 5% max; Cd 100ppm max; limited concentration of natural radioactivity: GB20664-2006 (suitable for customs clearance into China).
Quantity: Min 50 tonnes (cobalt content)
Location: cif China (other terms normalized)
Timing: 45 days
Unit: % payable of Fastmarkets’ standard-grade cobalt price (low end, $/lb)
Payment terms: Letter of credit, current and following price month ('M' and 'M+1')
Publication: Weekly, Wednesday, 3pm London time.
Notes: Where the publication day falls on a public holiday in England and Wales, the assessment will be rolled over from previous pricing session.

Index: Cobalt hydroxide index, min 30% Co, cif China, $ per lb
Quality: Units produced from large-scale mining activity, with the following chemical composition: Co 30% min, Mn 6.5% max, Mg 6.5% max, S 5% max; Cd 100ppm max; limited concentration of natural radioactivity: GB20664-2006 (suitable for customs clearance into China).
Quantity: Min 50 tonnes (cobalt content)
Location: cif China (other terms normalized)
Timing: 45 days
Unit: $/lb
Payment terms: Letter of credit, current price month ('M')
Publication time: 5pm London time, last working day of the month.

The consultation period for the above amendment will now end on Monday October 7. Subject to feedback, the following publication schedule will be followed:

Existing specifications:
Monday September 30: Payable indicator and index

Amended specifications:
Wednesday October 9 (and weekly on Wednesdays thereafter): Payable indicator
Thursday October 31: Index

To provide feedback on the above amendment or if you would like to provide price information by becoming a data submitter to the cobalt hydroxide reference prices, please contact Charlotte Radford and Susan Zou by email at pricing@fastmarkets.com. Please add the subject heading ‘FAO: Charlotte Radford/Susan Zou, re: cobalt hydroxide price assessment.’

To see all Fastmarkets’ pricing methodology and specification documents, please go to www.fastmarkets.com/about-us/methodology.

Charlotte Radford

charlotte.radford@fastmarkets.com

Published

Charlotte Radford

September 30, 2019

11:03 GMT

London