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Minor Metals: Japan cobalt demand robust despite high prices

TOKYO: With the start of the new financial year on April 1, Japanese importers have been taking a high profile in purchasing cobalt, but tight supplies have forced them to pay higher prices, traders said on Tuesday.

"Spot cobalt offers have been decreasing recently as suppliers are building stocks on fears of strikes at major North American producers," said a trader with a local trading house.

Local importers were closely watching labour talks at Canada's Inco Sudbury works and Falconbridge Ltd's Sudbury nickel-copper operation, he said.

Inco's present labour contract expires at the end of May, while Falconbridge's labour contract expires on August 1.

Although the tightness in low-grade cobalt was less than high-grade cobalt, he said some international traders were also holding back their offers for low-grade cobalt in the hope of a further rise in prices.

With the tight cobalt supplies, revived purchases by Japanese importers to cover their cobalt needs for this fiscal year, which began on April 1, have lifted prices, he said.

High-grade cobalt quotes were at $16.50-$17.50 per lb from $14.50-$15.20 a month earlier. Low-grade cobalt was offered at $14.50-$15.50 per lb from $14.00-$15.00 a month ago, said another trading house trader.

Trading in the local molybdenum market was thin, although traders had expected some activities by local end-users for the start of the new fiscal year.

Local molybdenum end-users remained sidelined as they are holding the metal stocks for more than two months, said a trader with a trading house. It was trading at $2.55-$2.60 per lb, down from $2.60-$2.65 per lb in early March.

INDIUM PRICES DOWN, MAGNESIUM UP

Indium selling prices posted by Nippon Mining and Metals Co Ltd 5716.T were unchanged from March at 30,000 yen per kg to local large-lot customers, and 35,000 yen for small-lot users, for indium of 99.99 percent purity, traders said.

Nippon Mining's indium selling price is regarded as a benchmark in the local market.

Import prices of indium of more than 99.99 percent purity were quoted at $170-$190 per kg, down from $180-$200 per kg in early March, a local trader said.

But he said prices of indium for making thin-film transistor (TFT) liquid crystal displays (LCDs) were unchanged due to steady demand from local industries.

Thin-film transistor liquid crystal displays are thin, light-weight, high-resolution screens, making them popular among makers and users of portable computers and mobile phones.

Chinese magnesium was offered at $1,550-$1,600 a tonne, up from $1,500-$1,530 a tonne in March, but spot trading was subdued from last month, a magnesium trader said.

The yen's weaker tone against the dollar has made local importers to stay sidelined as they have no need to hurry to cover their needs, he said.

Most local end-users were believed to have covered their needs for the metal until June through term deals early this year, he added. -Reuters