Market Briefing - July 21, 2008

The cobalt market remains under pressure due to continued oversupply of concentrates in China and speculative news that production in the DRC will increase. Low-grade prices have fallen from $42.50-44.00/lb in mid-June to $37/lb in mid-July, while the price of 99.8% material is now $41-42/lb, down from $45-46/lb at the start of June. However, we note high-grade prices are finding some support by premium sales of powder and briquettes.

China is currently undergoing a phase of destocking, reflecting the build up of cobalt concentrate imports. In Q1, this figure more than doubled on a y-o-y basis to 47,832 tonnes. More recent data suggests that China imported 27,494 tonnes in May, up 181% y-o-y. Cumulative imports of ore and concentrates were 107% up y-o-y at 97,132 tonnes. GFMS Metals Consulting believes concentrate imports have continued to increase since then.

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