Fabled Silver Gold Corp T.FCO

Cobalt Could Hit $21.00 / lb. in November

[soultraveler]

London, 21 October 2009 - Cobalt prices edged higher in Europe this week, with some trader buying having arrested a recent downward drift and encouraging some consumer interest, although the low level of prevailing demand suggests that end-users remain relatively relaxed, traders said.

On the free market, high-grade 99.8 percent metal was quoted at $17.50/18.05 per pound, up some $0.75 from last week, while 99.3 percent Russian metal stood at $16.00/17.00, up around $1.00.

"When it got down to around $14, it did smoke a few buyers out from those consumers who bided their time for lower prices," a trader said.

The $14/15 area is seen as the market floor - this is the level where concentrate production becomes less economic and starts to dry up. But fourth-quarter business has yet to materialise in significant quantities, although any upsurge could find material difficult to source, apart from traders.

"In November it could go to $21 - producers have no stocks; they just sell it as soon as they have it," another trader said.

And when trading starts on the LME in February 2010, market tightness may become more evident, underpinning the price further, he said.

"Low inventories and the LME could do wonders for the price," he added.

Cobalt has been buffeting over the past year amid high volatility. It reached five-year lows of $9 per pound for 99.3 grade material and $10 for 99.8 at the start of December last year, tumbling after hitting 30-year peaks and near-record highs of more than $50 per pound in May