Since the annual mating season in 2019, most cobalt hydroxide sellers and buyers have adopted a pricing mechanism for their long-term contracts for the crucial and preferred cobalt feedstock by introducing a floating payable - linked to the low- or mid-point of Fastmarkets’ payable indicator
against its standard-grade cobalt metal price.
Whereas some term contracts were pegged to the mid-point of the payable assessment with discounts last year, some suppliers that have already made offers have attempted to add a premium on top of the mid-point in the latest negotiations, according to both supplier and buyer sources.
The aggressive offers came despite additional supplies being expected next year, while the market has lowered its expectation of production growth in nickel-cobalt-manganese (NCM) lithium-ion batteries in 2022 in response to stronger-than-expected momentum in lithium iron phosphate batteries (LFP) batteries so far in the second half of 2021.
LFP batteries now account for around...