Cobalt prices are 52% off cyclical peak
Cobalt demand is soft, cobalt supply is in excess
By Tom Stundza -- Purchasing, 2/18/2009 2:13:00 PM
The cobalt market remains weak with sales virtually nonexistent and U.S. prices 52% off their cyclical peak; in fact, they are closing in on the $12/lb spot average reported this week in Europe. The month-to-date average in the U.S. is $14.83/lb, buyers report. A year ago this month, the domestic spot-market average was $48.71 and the 2008 U.S. annual average was $39.17.
Analysts at BMO Nesbitt Burns in Toronto recently forecast a full-year 2009 price of $16.50 for the byproduct of copper or nickel--rising only to $20 for 2010 in the U.S. market. Nickel prices are 77% off their early-2008 peak while copper prices are 58% off their peak.
Traders have been reporting for weeks that there is a lack of demand from makers of aerospace and power generation engines. They also have reported there is plenty of cobalt in the market due to of earlier shipments from the Jinchuan Group in China that have yet to be used. Jinchuan operates China’s largest nickel mine in northwestern Gansu province and produces lots of cobalt as well.
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