SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested 

Registered Entity Identifier Code (optional): 23-155

Organization: Commodity Exchange, Inc. ("COMEX")

Filing as a: DCM SEF DCO SDR 

Please note - only ONE choice allowed.

Filing Date (mm/dd/yy): 04/27/23 Filing Description: Increase of Spot Month Position 

Limit, Single Month Accountability Level and All Month Accountability Level of the Cobalt 

Metal (Fastmarkets) Futures Contract

SPECIFY FILING TYPE

Please note only ONE choice allowed per Submission.

Organization Rules and Rule Amendments

Certification § 40.6(a)

Approval § 40.5(a)

Notification § 40.6(d)

Advance Notice of SIDCO Rule Change § 40.10(a)

SIDCO Emergency Rule Change § 40.10(h)

Rule Numbers: 

New Product Please note only ONE product per Submission.

Certification § 40.2(a) 

Certification Security Futures § 41.23(a)

Certification Swap Class § 40.2(d)

Approval § 40.3(a)

Approval Security Futures § 41.23(b)

Novel Derivative Product Notification § 40.12(a)

Swap Submission § 39.5

Product Terms and Conditions (product related Rules and Rule Amendments)

Certification § 40.6(a) 

Certification Made Available to Trade Determination § 40.6(a)

Certification Security Futures § 41.24(a)

Delisting (No Open Interest) § 40.6(a) 

Approval § 40.5(a)

Approval Made Available to Trade Determination § 40.5(a)

Approval Security Futures § 41.24(c)

Approval Amendments to enumerated agricultural products § 40.4(a), § 40.5(a)

“Non-Material Agricultural Rule Change” § 40.4(b)(5)

Notification § 40.6(d)

Official Name(s) of Product(s) Affected: See filing.

Rule Numbers: See filing.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

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Christopher Bowen 

Managing Director and Chief Regulatory Counsel

Legal Department

April 27, 2023

VIA ELECTRONIC PORTAL

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, DC 20581

Re: CFTC Regulation 40.6(a) Certification. Increase of Spot Month Limit, Single Month 

Accountability Level and All Month Accountability Level of the Cobalt Metal 

(Fastmarkets) Futures Contract.

COMEX Submission No. 23-155

Dear Mr. Kirkpatrick:

Commodity Exchange, Inc. (“COMEX” or “Exchange”) certifies to the Commodity Futures Trading Commission 

(“CFTC” or “Commission”) an increase of the spot month limit, single month accountability levels and all month

accountability levels of the Cobalt Metal (Fastmarkets) Futures contract (the “Contract”) as noted in the table 

below effective on May 12, 2023 and commencing with the June 2023 contract month and beyond (collectively, 

the “Rule Amendments”).

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

(additions underscored; deletions struck through)

Contract Title Rulebook

Chapter

CME Globex and

CME ClearPort 

Code

Spot-Month 

Limit

Single Month 

Accountability 

Level

All Month 

Accountability 

Level

Cobalt Metal (Fastmarkets) Futures 645 COB

400

800

800

1,600

1,600

3,200

The Position Limit, Position Accountability and Reportable Level Table (the “Table”) located in the Chapter 

5 of the COMEX Rulebook is being amended to reflect the changes in the spot month limit, single month 

accountability levels and all month accountability levels for the Contract. Exhibit A provides amendments 

to the Table effective on May 12, 2023 and Exhibit B provides amendments to the Table effective on June 

1, 2023, the date that June 2023 becomes the spot contract month. Both Exhibit A and Exhibit B are 

provided under separate cover in blackline format. 

Fastmarkets, the Price Reporting Agency whose cobalt assessment is used to financially settle the 

Contract, recently announced that an additional metal brand would be included in the underlying 

assessment (see Fastmarkets’ pricing notice dated April 13, 2023). The Exchange conducted a 

comprehensive update of the Contract’s deliverable supply to include the additional brand: Sherritt 

briquettes. Exhibit C below provides the Exchange’s updated cash market overview and analysis of 

deliverable supply in connection with the Contract.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

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The Exchange reviewed the designated contract market core principles (“Core Principles”) as set forth in 

the Commodity Exchange Act (“Act” or “CEA”) and identified that the Rule Amendments may have some 

bearing on the following Core Principles:

• Contract Not Readily Susceptible to Manipulation: Due to the liquidity and robustness in 

the underlying cash markets, the Contract is not readily susceptible to manipulation.

• Position Limitations or Accountability: The speculative position limits for the Contract as 

demonstrated in this submission are consistent with the Commission’s guidance.

• Availability of General Information: The information contained herein will be disseminated to 

the marketplace via a Market Surveillance Notice (“MSN”). The MSN will also be posted on the 

CME Group website. In addition, the Exchange will continue to publish information on the 

contract specifications on its website, together with daily trading volume, open interest, and 

price information.

Pursuant to Section 5c(c) of the Act and CFTC Regulations 40.6(a), the Exchange hereby certifies that the 

Rule Amendments comply with the Act, including regulations under the Act. There were no substantive 

opposing views to the proposal.

The Exchange certifies that this submission has been concurrently posted on the CME Group website at 

http://www.cmegroup.com/market-regulation/rule-filings.html. 

Should you have any questions concerning the above, please contact the undersigned at (212) 299-2200 

or via e-mail at CMEGSubmissionInquiry@cmegroup.com. 

Sincerely,

/s/ Christopher Bowen 

Managing Director and Chief Regulatory Counsel 

Attachments: Exhibit A: Position Limits, Position Accountability and Reportable Level Table in Chapter

5 of the COMEX Rulebook (effective May 12, 2023) (attached under separate 

cover)

Exhibit B: Position Limits, Position Accountability and Reportable Level Table in Chapter

5 of the COMEX Rulebook (effective June 1, 2023) (attached under separate 

cover)

Exhibit C: Cash Market Overview and Analysis of Deliverable Supply
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Exhibit A

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”) 

Position Limits, Position Accountability and Reportable Level Table 

(attached under separate cover)

[effective May 12, 2023]

Exhibit B

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”) 

Position Limits, Position Accountability and Reportable Level Table 

(attached under separate cover)

[effective June 1, 2023]
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Exhibit C

Cash Market Overview and Analysis of Deliverable Supply

Commodity Exchange, Inc. (“COMEX” or “Exchange”) lists the Cobalt Metal (Fastmarkets) Futures contract 

(the “Contract”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for 

submission of clearing via CME ClearPort. 

Contract Title Rulebook 

Chapter

CME Globex

and

CME ClearPort 

Code

Cobalt Metal (Fastmarkets) Futures 645 COB

In its cash market and deliverable supply analysis, the Exchange has incorporated data from a range of 

sources as described below.

Fastmarkets (FM) is a leading global provider of price information for metals, agriculture and forestry 

products. FM’s assessment methodologies for cobalt are available on its website1. CME Group Inc. (parent 

company of COMEX) is a party to license agreements with Fastmarkets to utilize its pricing data for final 

settlement of the contract.

The United States Geological Survey (USGS) is a scientific public agency in the United States. USGS is 

tasked with studying the landscape of the United States, its natural resources, and the natural hazards that 

threaten the landscape.

Final settlement of the Contract is based on the monthly average of all daily price assessments for 

Fastmarkets “Cobalt standard grade, in-whs Rotterdam, $/lb.” The methodology refers to cobalt metal with 

a quality of minimum 99.8% cobalt metal content and matching the standard specifications of the following 

brands in original packaging: Katanga cathodes, Chambishi broken cathodes, CTT broken cathodes, 

Minara briquettes, Ambatovy briquettes, Norilsk grade 1 and grade 2 cut cathodes (production since 

January 2019). On April 13, 2013, Fastmarkets announced that effective immediately, Sherritt briquettes 

shall also be eligible for inclusion in the standard grade cobalt assessment.

2 The quantity required for 

inclusion is minimum 1 metric ton, maximum 100 metric tons and the location is in-warehouse, Rotterdam. 

Fastmarkets' price assessment is based on spot market activity which are settled deals consummated 

within a 30-day period and with all other terms normalized. The denomination is $/lb. The assessment is 

provided daily Monday-Friday on UK business days at 3:00 p.m. London local time. The cobalt metal price 

in Rotterdam serves as a worldwide reference price due to its central location between producing countries 

and global demand centers in Asia, Europe and the United States. In particular, cobalt hydroxide used in 

the battery manufacturing sold is bought and sold as a percent price of the cobalt metal price (the “cobalt 

hydroxide payable”).

1 https://www.fastmarkets.com/methodology/metals/cobalt

2 https://www.fastmarkets.com/insights/amendments-extension-to-cobalt-standard-grade-in-whs-rotterdam-cobalt-alloy-grade-inwhs-rotterdam-prices
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CASH MARKET OVERVIEW

Cobalt is a ferromagnetic metal found in the earth’s crust. It is typically mined as a by-product of copper 

and nickel mining operations. The Democratic Republic of Congo (DRC) is the world’s largest producer of 

cobalt. According to the USGS, it produced 68% of the global total in 2022. 

Table 1 – Global cobalt production (source: USGS3)

Mine production (metric tons) 2020 2021

2022

estimated

United States 600 650 800 

Australia 5,630 5,295 5,900 

Canada 3,690 4,361 3,900 

China 2,200 2,200 2,200 

Congo (Kinshasa) 98,000 119,000 130,000 

Cuba 3,800 4,000 3,800 

Indonesia 1,100 2,700 10,000 

Madagascar 850 2,800 3,000 

Morocco 2,300 2,300 2,300 

Papua New Guinea 2,940 2,953 3,000 

Philippines 4,500 3,600 3,800 

Russia 9,000 8,000 8,900 

Turkey - 2,400 2,700 

Other Countries 7,640 4,567 5,200 

World Total (rounded) 142,000 165,000 190,000 

Cobalt is used in many applications, among which: use in of cobalt in alloys (for aerospace, gas turbines, 

medical equipment, etc.), lithium-ion batteries, various electronics (integrated circuits, semi-conductors) 

and catalysts. Since cobalt is a key component in battery manufacturing, it is expected that growth in electric

vehicle usage will translate into increased demand for cobalt in the coming years.

3

https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-cobalt.pdf, https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-cobalt.pdf
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The cobalt brands currently contemplated in Fastmarkets’ assessment are mined and refined in the 

following regions and by the following firms:

Table 2 – Cobalt brands used in assessment (source: Fastmarkets)

Name Location Ownership

Katanga cathodes Katanga Province, DRC Katanga Mining/ Glencore

Chambishi broken cathodes Kitwe, Zambia Eurasian Resources Group 

CTT broken cathodes Bou-Azzer mine, Morocco Managem Group 

Minara briquettes Perth, Australia Glencore

Ambatovy briquettes Moramanga, Madagascar Sumitomo

Norilsk grade 1 and 2 cut cathodes Norilsk, Russia Nornickel

Sherritt Briquettes Cuba/Canada4 Sherritt Corporation

Based on publicly available annual reports, the Exchange determined annual production volume for the 

locations producing the assessed brands as follows. Overall, the locations account for about 1/5 of global 

cobalt production.

Table 3 – Production volumes of assessed brands (source: company reports)

Production ('000 MT) 2020 2021 2022

2020-2022 

average

Katanga cathodes 23.9 23.8 25.5 24.4

Chambishi broken cathodes* 3.4 3.4 3.4 3.4

CTT broken cathodes** 2.4 1.8 1.8 2.0

Minara briquettes 2.9 2.5 3.0 2.8

Ambatovy briquettes*** 2.8 2.8 2.8 2.8

Norilsk grade 1 and grade 2 cut 

cathodes**** 6.0 5.0 5.0 5.3

Sherritt 3.4 3.5 3.4 3.4

Total 44.8 42.8 44.9 44.1

Notes: 

* Production data for Chambishi was not available. The Chambishi refinery has an annual capacity of 6,800 tons/ year. We assumed 

that it was producing at 50% of capacity. 

** 2022 data for CTT not available, assumed same production as prior year

*** Production data for Ambatovy was not available. The Ambatovy refinery has an annual capacity of 5,600 tons/ year. We assumed 

that it was producing at 50% of capacity. 

**** 2022 data for Norilsk not available, assumed same production as prior year

For links to various company reports regarding production volume, see Appendix A below.

4 Sherritt briquettes are refined in Alberta province, Canada, from material mined and processed in Moa, Cuba.
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Physical trade in cobalt takes place throughout a complex supply chain involving producers, refiners, 

merchants, and end-users. Cobalt is traded in the spot market as well as using floating index prices or on 

a fixed price basis for term contracts. Term contracts typically allow to freely re-trade contracted volume.

The growth in electric vehicle manufacturing has led to higher demand for cobalt sulfate, the cobalt 

intermediate product used in lithium-ion batteries. Cobalt sulfate can be manufactured from cobalt metal 

but is typically refined directly from cobalt intermediate products such as cobalt hydroxide. Because cobalt 

metal is consumed in traditional industrial applications and can also find its way in lithium-ion batteries via 

chemical conversion, it serves as the benchmark price in both sectors. Intermediate products in the cobalt 

supply chain are priced with reference to the price of cobalt metal on a “percent payable basis.”

ANALYSIS OF DELIVERABLE SUPPLY

Appendix C to part 38 of the Commission’s regulations defines deliverable supply as “the quantity of the 

commodity meeting the contract’s delivery specifications that can reasonably be expected to be readily 

available to short traders and saleable by long traders at its market value in normal cash marketing channels 

at the derivative contract’s delivery points during the specified delivery period, barring abnormal movement 

in interstate commerce.”

The Exchange assessed spot month limits for the Contract based on production data for the mines whose 

brands are eligible for inclusion in the underlying Fastmarkets market assessment. 

The Contract was initially launched on December 14, 2020 (see Submission No. 20-463 dated November 

24, 2020). At that time, an adjustment of 50% to the deliverable supply was made to account for: a) the 

share of mining production that may go directly into chemical refining for the battery manufacturing sector 

without processing into cobalt metal; and b) regional availability of the commodity by removing material that 

may not necessarily be readily available in Rotterdam warehouses.

Following feedback from market participants and the Exchange’s recent review of the underlying physical 

cobalt market, the Exchange believes that the adjustment adopted at launch due to an abundance of 

caution in a previously unfamiliar market is no longer required. Pricing across the cobalt supply chain is 

inherently linked to cobalt metal – the battery sector buys cobalt products on a metal payable basis. The 

reason behind this close price linkage is that market participants have the possibility to convert metal into 

other cobalt products, and vice-versa. Physical arbitrage between the two forms of cobalt will keep prices 

from disconnecting. Arbitrage trading will move material in and out of warehouses in China (the main hub 

of cobalt demand) into or out of Rotterdam and other locations. The Exchange therefore believes that its 

original adjustment unnecessarily restricted the amount of the commodity that could potentially be made 

available for sale on a spot basis. 

Deliverable supply in the Contract is defined as the average annual production volumes of 44,100 MT, 

equivalent to 3,675MT per month. This is equivalent to 3,675 contract lots per month. The Exchange 

proposes a spot month position limit of 800 contracts, equivalent to 21.7% of deliverable supply.
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Appendix A – company reports for production volumes

Glencore

https://www.glencore.com/dam/jcr:e43e5f94-6484-4332-9f09-e3601aafb44f/GLEN_2022-

FY_ProductionReport.pdf

https://www.glencore.com/dam/jcr:90d4d8f9-a85e-42ec-ad8a-b75b657f55d2/GLEN_2021-fullyear_ProductionReport.pdf

Chambishi

https://www.ergafrica.com/cobalt-copper-division/chambishi-metals/

CTT

https://managemgroup.com/files/2022-04/RFA%20MANAGEM%202021_0.pdf

Ambatovy

https://ambatovy.com/en/operations/operations-components/

Norilsk

https://www.nornickel.com/upload/iblock/1cc/sju417vvrpj0kytcmkfllm0eu87rgtmx/NN_AR_2021_Book_EN

G_26.09.22.pdf

https://www.nornickel.com/upload/iblock/305/2020_annual_report_of_nornickel.pdf

Sherritt

https://www.sherritt.com/English/Investor-Relations/News-Releases/News-Release-Details/2023/SherrittReports-Strong-2022-Production-Results-and-Provides-2023-Guidance/default.aspx

https://www.sherritt.com/English/Investor-Relations/News-Releases/News-Release-Details/2022/SherrittEnds-2021-With-Strong-Production-Results-and-a-Favourable-Outlook-for-Nickel-and-Cobalt-Markets/