Cobalt metal prices in China soared to their highest last week in almost two years. Traders are chalking up the increase in price to the new round of buying by China’s state stockpiler.
On the Wuxi Stainless Steel Electronic Trading Center, which is used as a reference for spot deals in the country, cobalt was being sold at 319.50 yuan/kg, or roughly $49.42. This is the highest price recorded in cobalt since Jan. 11, 2019. Despite this being the second week of 2021, the metal is already up by more than 13%.
In addition to this, since 2021 began, the price of cobalt metals on the London Metal Exchange have increased by about 10%, selling at $35,500 per ton. This is the metal’s highest level since 2019 in November. Cobalt is used to manufacture alloys for jet turbine blades.
It is reported that the biggest consumer of cobalt in China was advised by Antaike, a state-supported research house, to amass metals on account of the sharp decline in commodity prices in 2020 as a result of the coronavirus outbreak. However, the details of the official plans to purchase cobalt have not been revealed to the public.
Two traders dealing in cobalt attributed the latest increase in the price of cobalt to stockpiling, with one of the traders explaining that coronavirus-driven logistical disruptions in South Africa limited the supply of cobalt. This is because while most of the cobalt produced in the world is mined in the Democratic Republic of Congo, it is transported to international markets through ports in South Africa.
In November 2020, Reuters reported that the National Food and Strategic Reserves Administration in China would purchase two thousands tons of cobalt in the first cycle of stockpiling, hinting that a second cycle could follow.
CRU analyst George Heppel tweeted that the consultancy understood that China’s stockpiler had consented to purchasing an additional three thousand tons of cobalt, which would increase the total purchased amount to five thousand tons.
In a separate communication, Heppel stated that stockpiling would happen gradually in 2021, adding that the increase in the price of cobalt was most probably being driven by trader optimism.
However, no confirmation has been made as a spokesman stated that he was unaware of any plans to stockpile cobalt, while efforts by local media to reach the reserves administration for a comment outside normal business hours proved futile.
Away from China and cobalt, GoldHaven Resources Corp. (CSE: GOH) (OTCQB: GHVNF), a Canada-based mining firm, has acquired seven mineral-rich properties in Northern Chile. Those properties are located in an area that has yielded more than 100 million gold ounces over the past decade.
NOTE TO INVESTORS: The latest news and updates relating to GoldHaven Resources Corp. (CSE: GOH) (OTCQB: GHVNF) are available in the company’s newsroom at http://ibn.fm/GHVNF
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