Cobalt supply is tight, boosting prices

By Tom Stundza -- Purchasing, 4/2/2008 9:59:00 AM

Spot cobalt prices increased to a $52/lb in the U.S. market in March, reflecting the projected 10-20% increase in global demand and virtually no growth in output—and bringing the first quarter average to $49. Cobalt is used as an alloy in the production of magnetic, wear-resistant, and high-strength metals. Its compounds also are used in the production of inks, paints and varnishes.

World prices this week remain around $50, which could bring the U.S. market prices closer to $54 this month once freight, insurance and tariff charges are added. Cobalt cost U.S. buyers an average $30 last year, according to Purchasingdata.com.

Latest production figures from the Cobalt Development Institute (CDI) shows that global refined cobalt supply grew by only 1% last year and traders are anticipating little or no growth this year, because of delays to new projects. In 2007, total cobalt supply grew to 53,723 metric tons from 53,632 metric tons in 2006. The 2007 figure included 53,106 metric tons of production by CDI members and non-members globally and 617 metric tons of metal from the U.S. Defense National Stockpile Center.