CHICAGO -- Cobalt and molybdenum trading have made "an encouraging start" in the six months since it was launched on the London Metal Exchange on Feb. 22, exchange officials said Monday.
Total notional value of contracts for the two minor metals traded in the first months was put at $230 milliion. Cobalt volume so far has been 4,047 or 4,047 tonnes valued at $161 million and totaled 427 tonnes in the first full months but has been over 800 tonnes per month since May when a peak of 893 tonnes were traded.
Molybdenum volume was put at 321 lots or the equivalent of 1,926 tonnes valued at $69 million. Volumes have swung widely from month to month with 480 tonnes traded in the first full month followed by two months under 200 tonnes and a peak of 516 tonnes in June followed by 216 tonnes in July. For August by Friday trading volume of 348 tonnes had been tallied, officials said.
The LME's bigger base metals contracts traded a total of 111.9 million lots valued at the equivalent of $7.4 trillion last year, or $29 billion on an average business day.
Executives said they considered volumes, liquidity and open interest for the minor metals to be building well and said they were particularly encouraged by the progress of cobalt. At the close of trading Thursday, cobalt market open interest, which is published two days later by the exchange, had grown to 406 lots (406 tonnes) and open molybdenum open interest was 41 lots or 246 tonnes.
Nine cobalt brands have been registered by the exchange, including Vale Inco, Norilsk and Votorantim. Another seven molybdenum brands are registered, including Molymet, Molymex and China Molybdenum.
"This has been a very promising start for minor metals trading on the LME," said Chris Evans, head of business development. He noted that the development of liquidity takes time and described the first six months as setting good foundations to engage more brands, build a warehouse network and attract more market users who seek price transparency, risk management and the benefits of trading cleared contracts.
