SINGAPORE, Feb. 10 -- Jiangsu Cobalt Nickel Metal Co., a Chinese producer, has agreed on a long-term sales contract with a customer that will use prices from the London Metal Exchange, according to world's biggest marketplace for industrial metals.
Jiangsu Cobalt has sealed the agreement with LN Metals International Ltd. for its KLK brand cobalt from this year's export quota, the LME said in a statement yesterday, without giving volumes. It's the second deal to be based on LME prices after Votorantim Metais Ltda, the exchange said.
The LME will introduce a contract for cobalt from Feb. 22, about two-and-a-half years after saying that it was considering the product. The metal, used in rechargeable batteries, is a byproduct of nickel mining.
For a contract to "gain traction," physical material needs to be priced using the exchange's formula, the Web site statement said. Other producers that have obtained registration with the LME include Russia's OAO GMK Norilsk Nickel, Vale Inco Ltd. and Sumitomo Metal Mining Co., it said.