PRICING NOTICE: Proposal to increase frequency of cobalt hydroxide payable indicator

Fastmarkets is proposing to increase the pricing frequency of its cobalt hydroxide payable indicator, min 30% Co, cif China, to twice weekly from weekly.

The cobalt hydroxide payable indicator, min 30% Co, cif China, % payable of Fastmarkets’ standard-grade cobalt price (low-end), is currently published weekly, on Wednesdays.
Following an initial consultation with the market, and a review of typical data sets that are collected over the course of the week, Fastmarkets now proposes to assess and publish the price twice a week, on Wednesdays and Fridays.
Following the emergence of a spot cobalt hydroxide market in late 2018, a growing number of market participants have adopted a buying pattern whereby spot payables are negotiated based on the market fundamentals close to the time of shipment. Spot activity is therefore sufficient to support more frequent price discovery.
The cobalt hydroxide market has also proved to be volatile in response to market events such as the closure of Glencore’s Mutanda mine late last year and the outbreak of Covid-19 virus more recently. More frequent price discovery will be more responsive to market moves.
The proposed twice weekly assessment will also match Fastmarkets’ current pricing window for cobalt metal, cobalt sulfate and cobalt tetroxide prices in China (assessed on Wednesday and Friday), the latter two being major downstream chemicals that are produced from cobalt hydroxide. Consequently, market participants will be able to look at margins in a more accurate and timely way.
The frequency of publication for the cobalt hydroxide index, 30% Co min, cif China, will remain unchanged. It is published on the last working day of each month.
The proposed new specifications are listed below, with the proposed amendment in italics:
Price name: 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, $ per lb)
Payment terms: Letter of credit at sight, current and following price month (‘M’ and ‘M+1’)
Publication: Twice weekly, Wednesday and Friday, 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.
The consultation period for the above proposal will end 30 days from the date of this pricing notice, on April 27, with the amended frequency, subject to feedback, taking effect from Friday May 1.
All historical data relating to the assessment prior to the amendment will remain available in the pricing section of the Fastmarkets website.
To provide feedback on the cobalt hydroxide price assessments, or if you would like to provide price information by becoming a data submitter, 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 assessments.
To see all Fastmarkets’ pricing methodology and specification documents go to https://www.fastmarkets.com/about-us/methodology
 

Charlotte Radford

charlotte.radford@fastmarkets.com

Susan Zou

susan.zou@metalbulletinasia.com

Published

Charlotte Radford

Susan Zou

March 27, 2020

14:52 GMT

London, Shanghai