Fastmarkets is initiating a consultation on a proposed increase in the frequency of its benchmark prices for cobalt standard grade and cobalt alloy grade, in whs Rotterdam, to daily.
Fastmarkets currently assesses both prices on Wednesday and Friday each week.
To facilitate data contribution on a daily basis, Fastmarkets can discuss the capacity for data submitter agreements and back-office or more automated forms of data submission if data submitters wish to do so.
Initial feedback suggests that daily pricing would be more responsive to price moves in the cobalt market, notably during times of volatility, which have become more common over the past four years.
Market feedback therefore suggests that cobalt prices assessed on a daily basis would be more representative of the cobalt market at a specific point in time, giving those prices greater utility in a market where Fastmarkets’ price assessments are the physical benchmark.
Volatility is measured by considering the standard deviation of session-to-session price changes in percentage terms and then averaged by quarter.
As well, an internal review of data collected for Fastmarkets’ cobalt price discovery suggests traded volumes and market activity are reported at such a level that the price assessments could be published on a daily basis without compromising robustness, diversity of contributions from a wide pool of market participants; or a reporters’ ability to make an informed assessment of the price.
Fastmarkets recognizes that discussions are under way for 2020’s cobalt contracts and that these will continue in the coming weeks. Given Fastmarkets’ cobalt prices are written into many of the contracts typically agreed during this time, it is considered timely to run this consultation over October and November.
To ensure clarity ahead of the 2020 contracts coming into effect, Fastmarkets invites feedback on the above consultation until Wednesday November 27. Fastmarkets will notify the market of its conclusion and any proposed time frame for the rollout of daily pricing on Monday December 2.
Should market feedback prove supportive of a move to daily cobalt pricing, the increase in frequency could start as early as Thursday January 2.
The two prices under consideration for daily assessment are:
To provide feedback on the proposed daily cobalt pricing, or if you would like to provide price information by becoming a data submitter to Fastmarkets’ cobalt prices, please contact Charlotte Radford by email at email@example.com. Please add the subject heading: FAO: Charlotte Radford re: daily cobalt pricing.
To see all Fastmarkets’ pricing methodology and specification documents, please go to www.fastmarkets.com/about-us/methodology.