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Skip Navigation LinksHome :: Norilsk plans to suspend publication of cobalt prices [UPDATE]

Tuesday, August 12, 2008

Norilsk plans to suspend publication of cobalt prices [UPDATE]

Norilsk Nickel plans to suspend publication of cobalt prices on its website as a result of an internal review of the practice of publishing supplementary information about the market




[Adds details: traders’ comments; price and market information]

Norilsk Nickel plans to suspend publication of cobalt prices on its website as a result of an internal review of the practice of publishing supplementary information about the market, a source at Norilsk said.

“The website is closed, at least temporarily,” he said, adding that the indicative offer of 99.3% cobalt at $32 per lb on August 6 is the last such price that will be published.

Norilsk believed that the website, on which it published offer prices and the average prices of business concluded in previous weeks, was useful when the market was more fragmented, the source said.

Switzerland-based trader and producer Glencore holds a considerable part of the cobalt market and that may have weighed on the company’s decision, he said.

“It was a useful tool to deliver information to market participants, but Norilsk will get more flexibility now,” he said.

“We feel we may be giving away too much information to another big player in the market about our own business,” the source said.

Norilsk Nickel will continue to sell cobalt, but without publishing prices or indicative offers.

The Russian producer signed a deal to supply up to 2,500 tpy of cobalt metal to OM Group back in 2006.

But it also sells around 180 tpm of ingots from current production, an experienced cobalt market source said.

The decision comes as the cobalt market continues to fall. Low-grade prices dropped to $27.50-28.50 per lb last week from a peak of $48.25-49 at the start of April.

The Norilsk source refused to comment on whether the decision to suspend pricing was related to the change in management at the company.

Ceo Denis Morozov was dismissed in July. Deputy ceo Tav Morgan left the company shortly afterwards.

Norilsk’s move removes one of the benchmarks that market participants used to assess where to pitch business, a London-based trader said.

“Of the producers you used to be able to look at Jinchuan, Norilsk and BHP. They introduced it as a sign of transparency, and I don’t know why they changed their minds,” he said.

“Perhaps it became too much hassle,” he said. “When the market moved quickly, traders would bid them at their offer price and they’d end up having to explain why they were no longer selling at that level,” he said.

A second trader was more sceptical, though.

“I think the info up there was just what they wanted people to see,” he said, echoing others who said they were unclear on whether the weighted average prices of past businesses reflected just the international market, or also included some domestic sales.






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