Argus launches prices for Chinese-origin cobalt delivered to Europe

 
Global commodity price reporting agency Argus is expanding its suite of cobalt prices with the launch of a new daily Rotterdam assessment for Chinese-origin cut cathode. The launch will bring much-needed clarity to the cobalt market at a time when there has been an influx of Chinese material to Europe
China’s exports of unwrought cobalt metal to the Netherlands jumped to 5,478t in January-August from 1,989t a year earlier, both because of over-production and as a result of weaker-than-expected demand from China’s domestic battery industry. Europe has borne the brunt of China’s increased cobalt exports because US consumers are often unwilling to use Chinese cobalt within their supply chains.
The flood of Chinese-origin cobalt moving to Europe has become problematic for existing Rotterdam price mechanisms, which have failed to sufficiently distinguish between standard chemical-grade metal, alloy-grade metal and Chinese-origin cut cathode. Conflating Chinese cut cathode with either of the other products can be problematic, because the material is typically much cheaper than other cathode, and more prone to variations in grade.
Moreover, inside China, cobalt hydroxide  — an important battery material — is typically priced using formulae themselves tied to European cobalt metal prices. Lack of clarity about European prices could compromise the basis on which hydroxide trades — a market that stretches far beyond Europe.
Argus Media chairman and chief executive Adrian Binks said: “Our new assessments of Chinese-origin cut cathode delivered into Europe provide vital market transparency. Chinese cut cathode has consistently been trading at a discount to standard alloy-grade and chemical-grade cobalt metal in Europe – including it in an existing Rotterdam price mechanism runs the risk of reducing the precision of published prices. Creating this additional price adds some much-needed clarity.”
The new European price assessment for min 99.8% Chinese-origin cut cathode will be assessed daily on a duty unpaid Rotterdam basis for 1t +/- 2% lots. It rounds out Argus’ existing suite of cobalt prices, which span the full value chain across China, Europe and the US.
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