News

March 07, 2010

Look To The Australian Economy For A Guide To Sentiment, As Coal And Metals Power Ahead

By Rob Davies

Cobalt and molybdenum trading has been underway on the LME for two weeks now and by all accounts has made a good start. These minor metals have high values and both are vital constituents for making steels, and especially the high quality special steels. Some measure of their importance can be gleaned from the prices they trade at. Cobalt is priced at around US$39,950 a tonne, while molybdenum is a tad cheaper at US$37,500 a tonne, although most mining hands tend to think of prices for these metals in pounds rather than tonnes.

Despite their speciality nature the total annual value traded in these two metals now amounts to about US$7.5 billion a year.

The great advantage of trading metals through the LME is that all participants know exactly what they are getting in terms of the quality and purity of the commodity. There is no subjectivity, and hence no room for debate on the price, relative to the constituents of the metal.

And of course, that’s also one of the reasons why the largest commodities by volume are...