SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested 

Registered Entity Identifier Code (optional): 23-300

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

Filing as a: DCM SEF DCO SDR 

Please note - only ONE choice allowed.

Filing Date (mm/dd/yy: 09/15/23 Filing Description: Initial Listing of the Cobalt Hydroxide 

CIF China (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

September 15, 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 40.2(a) Certification. Initial Listing of the Cobalt Hydroxide CIF 

China (Fastmarkets) Futures Contract.

COMEX Submission No. 23-300

Dear Mr. Kirkpatrick:

Commodity Exchange, Inc. (“COMEX” or “Exchange”) is certifying to the Commodity Futures Trading 

Commission (“CFTC” or “Commission”) the initial listing of the Cobalt Hydroxide CIF China (Fastmarkets)

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

submission for clearing via CME ClearPort effective Sunday, October 22, 2023, for trade date Monday, 

October 23, 2023, as noted in the table below:

Contract Title Cobalt Hydroxide CIF China (Fastmarkets) Futures

CME Globex and

CME ClearPort Code COH

Rulebook Chapter 643

Settlement Type Financial

Contract Size 2,204.62 lbs (pounds)

Listing Schedule Monthly contracts listed for the current year and the next 4 calendar years.

Pricing Quotation U.S. dollars and cents per pound

First Listed Month November 2023

Minimum Price Fluctuation $0.01 per pound

Value per tick $22.0462

Block Trade Minimum Threshold and 

Reporting Window 2 contracts – subject to a minimum 15-minute reporting window

Termination of Trading Trading terminates on the last UK business day of the contract month. If this 

is not a U.S. business day, trading terminates on the prior U.S. business day.

CME Globex Matching Algorithm First in First Out (FIFO)

Trading and Clearing Hours

CME Globex Pre-Open: Sunday 4:00 p.m. - 5:00 p.m. Central Time/CT 

Monday - Thursday 4:45 p.m. - 5:00 p.m. CT 

CME Globex: Sunday - Friday 5:00 p.m. CT with a daily maintenance 

period from 4:00 p.m. - 5:00 p.m. CT 

CME ClearPort: Sunday - Friday 5:00 p.m. - 4:00 p.m. CT with no reporting 

Monday - Thursday from 4:00 p.m. - 5:00 p.m. CT
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 is also notifying the CFTC that it is self-certifying block trading on the Contract with a 

minimum block threshold of two (2) contracts which is commensurate with the Exchange’s similar battery 

metals futures contracts.

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

the Commodity Exchange Act (“CEA” or “Act”) and identified that the Contract may have some bearing on 

the following Core Principles:

• Availability of General Information: The Exchange will publish information on the Contract's 

specification on its website, together with daily trading volume, open interest and price information.

• Contracts Not Readily Subject to Manipulation: The Contract is based on a cash price series 

that is reflective of the underlying cash market and is commonly relied on and used as a reference 

price by cash market brokers and commercial market participants.

• Compliance with Rules: Trading in this Contract will be subject to Chapter 4 of the Exchange 

rules which includes prohibitions against fraudulent, non-competitive, unfair and abusive practices 

and will be subject to extensive monitoring and surveillance by CME Group’s Market Regulation 

Department. The Market Regulation Department may use its investigatory and enforcement power 

where potential rule violations are identified during its regular surveillance reviews.

• Prevention of Market Disruption: Trading in the Contract will be subject to the Rules of COMEX 

which include prohibitions on manipulation, price distortion, and disruption to the cash settlement 

process. As with any new product listed for trading on a CME Group designated contract market, 

trading activity in the Contract proposed herein will be subject to monitoring and surveillance by 

CME Group’s Market Regulation Department.

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

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

• Financial Integrity of Contracts: The Contract traded on the Exchange will be cleared by the 

CME Clearing House.

• Execution of Transactions: The Contract will be listed for trading on the CME Globex electronic 

trading and for clearing through CME ClearPort. The CME Globex electronic trading venue provides 

for competitive and open execution of transactions. CME Globex affords the benefits of reliability 

and global connectivity.

• Trade Information: All requisite trade information for the Contract will be included in the audit trail 

and is sufficient for the Market Regulation Department to monitor for market abuse.

• Protection of Market Participants: Chapter 4 contains multiple prohibitions precluding 

intermediaries from disadvantaging their customers and which apply to trading on all of the 

Exchange’s competitive trading venues.

• Disciplinary Procedures: Chapter 4 of the Rulebook contains provisions that allow the Exchange 

to discipline, suspend or expel members or market participants that violate the Rulebook. Trading 

in the Contract will be subject to Chapter 4, and the Market Regulation Department has the authority 

to exercise its enforcement power in the event rule violations in this product are identified.

• Dispute Resolution: Disputes with respect to trading in the Contract will be subject to the 

arbitration provisions set forth in Chapter 6 of the Rulebook. Chapter 6 allows all non-members to 

submit a claim for financial losses resulting from transactions on the Exchange to arbitration. A 
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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member named as a respondent in a claim submitted by a non-member is required to participate 

in the arbitration pursuant to Chapter 6. Additionally, the Exchange requires that members resolve 

all disputes concerning transactions on the Exchange via arbitration.

• Daily Publication of Trading Information: Trading volume, open interest and price information 

will be published daily on the Exchange’s website and via quote vendors.

Pursuant to Section 5c(c) of the Act and CFTC Regulation 40.2(a), the Exchange certifies that the listing of 

the Contract complies with the Act, including regulations under the Act. There were no substantive opposing 

views to this 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: COMEX Rulebook Chapter 643

Exhibit B: Position Limit, Position Accountability, and Reportable Level Table in Chapter 5

 of the COMEX Rulebook (attached under separate cover)

Exhibit C: Exchange Fees

 Exhibit D: COMEX Rule 588.H. – (“Globex Non-Reviewable Trading Ranges”) Table

Exhibit E: COMEX Rule 589. (“Special Price Fluctuation Limits and Price Limits”) Table

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

COMEX Rulebook

Chapter 643

Cobalt Hydroxide CIF China (Fastmarkets) Futures

643100. SCOPE OF CHAPTER

The provisions of these rules shall apply to all contracts bought or sold on the Exchange for cash 

settlement based on the Floating Price. The procedures for trading, clearing and cash settlement of this 

contract, and any other matters not specifically covered herein shall be governed by the general rules of 

the Exchange.

643101. CONTRACT SPECIFICATIONS 

The Floating Price for each contract month is equal to the arithmetic average of all available price 

assessments published for “Cobalt hydroxide, min 30% Co, inferred, China, $ per lb” in $/pound by 

Fastmarkets during the contract month.

643102. TRADING SPECIFICATIONS

The number of months open for trading at a given time shall be determined by the Exchange.

643102.A. Trading Schedule

The hours of trading for this contract shall be determined by the Exchange.

643102.B. Trading Unit

The contract quantity shall be 2,204.62 pounds (equivalent to 1 metric ton). Each contract shall be valued 

as the contract quantity (2,204.62) multiplied by the settlement price.

643102.C. Price Increments 

Prices shall be quoted in U.S. dollars and cents per pound. The minimum trading price fluctuation shall 

be $0.01 per pound. The minimum daily and final settlement price fluctuation shall be $0.01 per pound.

643102.D. Position Limits, Exemptions, Position Accountability and Reportable Levels 

The applicable position limits and/or accountability levels, in addition to the reportable levels, are set forth 

in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations & Special 

Notices Section of Chapter 5. A Person seeking an exemption from position limits for bona fide 

commercial purposes shall apply to the Market Regulation Department on forms provided by the 

Exchange, and the Market Regulation Department may grant qualified exemptions in its sole discretion. 

Refer to Rule 559 for requirements concerning the aggregation of positions and allowable exemptions 

from the specified position limits.

643102.E. Termination of Trading

Trading in the contract shall terminate at the close of trading on the last UK business day of the contract

month. If such day is not an Exchange business day, trading in the contract shall terminate on the

Exchange business day that is immediately prior.

643102.F. Special Price Fluctuation 

Limits at the commencement of each trading day, the contract shall be subject to special fluctuation limits 

as set forth in Rule 589 and in the Special Price Fluctuation Limits and Daily Price Limits Table in the 

Interpretations & Special Notices Section of Chapter 5.

643103. FINAL SETTLEMENT

Delivery under the contract shall be by cash settlement. Final settlement, following termination of trading 

for a contract month, will be based on the Floating Price. The final settlement price will be the Floating 

Price calculated for each contract month. 

643104. DISCLAIMER

See NYMEX/COMEX Chapter iv. (“DISCLAIMERS”) incorporated herein by reference. 
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Exhibit B

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

Position Limits, Position Accountability and Reportable Level Table

(attached under separate cover)

Exhibit C

Exchange Fees

Member Non-Member

CME Globex $4.00 $8.00

EFP $9.00 $10.00

Block $9.00 $10.00

EFR/EOO $9.00 $10.00

Processing Fees Member Non-Member

Cash Settlement $9.00 $10.00

Facilitation Fee $0.60

Give-Up Surcharge $0.05

Position Adjustment/Position 

Transfer $0.10
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Exhibit D

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

COMEX Rule 588.H. – (“Globex Non-Reviewable Trading Ranges”) Table

(additions underscored)

Outrights Spreads

Instrument Globex 

Symbol

Globex NonReviewable Ranges 

(NRR)

NRR: 

Globex 

Format

NRR:Minimum 

Ticks

NRR: 

Globex 

Format

NRR: 

Outright 

Minimum 

Ticks

Cobalt Hydroxide CIF China 

(Fastmarkets) Futures COH $.50 per pound 50 50 N/A
7

Exhibit E

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

COMEX Rule 589 – (“Special Price Fluctuation Limits and Price Limits”) Table

(additions underscored)

Product Rulebook Commodity 

Code PRIMARY/ASSOCIATED ASSOCIATED WITH

Dynamically 

Calculated 

Variant - All 

Hours

Daily 

Price 

Limit

Cobalt Hydroxide 

CIF China 

(Fastmarkets) 

Futures

643 COH Primary Primary

10% of 

Dynamically 

Calculated 

Reference 

Price

Daily 

Price 

Limit 

Table
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Exhibit F

Cash Market Overview and Analysis of Deliverable Supply

Commodity Exchange, Inc. (“COMEX” or “Exchange”) will list the Cobalt Hydroxide CIF China 

(Fastmarkets) Futures contract (the “Contract”) for trading on the CME Globex electronic trading platform 

(“CME Globex”) and for submission of clearing via CME ClearPort. 

In its cash market overview and deliverable supply analysis, the Exchange considered 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 website.

1 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.

The Cobalt Institute is a trade association composed of producers, users, recyclers, and traders of cobalt. 

The association’s aims are to promote the sustainable and responsible production and use of cobalt in all 

its forms.

The International Trade Center (ITC) is a multilateral agency which has a joint mandate with the World 

Trade Organization (WTO) and the United Nations (UN) through the United Nations Conference on Trade 

and Development (UNCTAD).

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

Fastmarkets “Cobalt hydroxide, min 30% Co, inferred, China, $ per lb” (code MB-CO-0023). The 

denomination is in $/lb. The assessment is provided daily Monday-Friday on UK business days at 3:30 p.m. 

London local time. The cobalt hydroxide cobalt price is based on two components – the “cobalt metal” price 

and the “cobalt hydroxide payable.”

• The cobalt metal price as assessed by Fastmarkets is a daily price range for standard grade cobalt 

priced in-warehouse Rotterdam and 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. COMEX current avails for trading and clearing a futures contract, Cobalt Metal 

(Fastmarkets) Futures (COMEX Chapter 645: Commodity Code: COB) which cash-settles against 

the Fastmarkets cobalt metal price.

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

Contract Title

CME Globex

and

CME ClearPort

Code

Rulebook 

Chapter

Cobalt Hydroxide CIF China (Fastmarkets) Futures COH 643
9

• Cobalt hydroxide used in battery manufacturing is typically bought and sold as a percent price of 

the cobalt metal price (the “cobalt hydroxide payable”). The cobalt hydroxide payable is a 

percentage price for cobalt hydroxide (min. cobalt content 30%) assessed on a CIF China basis. 

The payable will move depending on the relative supply/demand balance for hydroxide vs. metal.

The cobalt hydroxide inferred price combines the metal price and the payable to provide a $/lb daily inferred 

price for cobalt hydroxide. 

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: USGS2)

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 

2 https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-cobalt.pdf,

https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-cobalt.pdf
10

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. The battery sector accounts for 70% of total cobalt demand (40% electric vehicles and 30% 

portable electronics). Since cobalt is a key component in battery manufacturing, it is expected that growth 

in electric vehicle usage and energy storage applications will translate into increased demand for cobalt in 

the coming years. According to the Cobalt Institute’s latest market report, to 2030, demand is forecast to 

rise by 108% over 2022, to close to 388 kt (rising at a compound annual growth rate, CAGR, of 10%). This 

would see the cobalt market more than doubling in size relative to 2022.

3

Chart 1 – Cobalt demand by end-use (source: Cobalt Institute Cobalt Market Report 2022)

Cobalt hydroxide is the main feedstock for cobalt sulphate that is used in EV battery cathode manufacturing. 

The main trade flows of cobalt hydroxide are from the Democratic of Congo to China, which is the main hub 

for cobalt hydroxide refining into cobalt sulphate. Cobalt sulphate is then mostly processed in Asia, with 

major battery producers located in South Korea, Japan, and China respectively. The finished batteries are 

then distributed to EV manufacturers across the globe. Chart 2 documents that cobalt hydroxide 

represented the main cobalt product imported into China, accounting for 80-90% of total imports from 

Q3’2021 onwards. It ran at >20,000 metric tons/month in 2022.

3 https://www.cobaltinstitute.org/wp-content/uploads/2023/05/Cobalt-Market-Report-2022_final.pdf
11

Chart 2 – Cobalt hydroxide imports into China, MT per month (source: Cobalt Institute Cobalt Market 

Report 2022)

Table 1 below shows imports of cobalt intermediate products into China based on the ITC Trade Map4 and 

sourced from the General Customs Administration of China statistics. The imports accounted for an average 

of 329,504 metric tons per year in the period 2020-2022, equivalent to 27,459 MT per month, in line with 

the figures of approximately 20-30,000 MT/month in 2022 provided in Chart 2.

Table 1 – China imports of cobalt matte and other intermediate products (MT) (source: ITC)

2020 2021 2022 Average

309,808 317,697 361,006 329,504 

Cobalt hydroxide is traded both in the spot and term markets. Term contracts are using fixed price or a 

“formula pricing,” meaning a floating price component that may include indexation to market reference 

prices. Term contracts typically allow to freely re-trade contracted volume.

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 is assessing spot month position limits for the contract based on ITC import data for cobalt 

intermediate products into China. Average annual import volume into China represents 329,504 MT 

annually for the 2020-2022 period, equivalent to 27,459 MT per month. To account for the share of cobalt 

hydroxide imports only, the Exchange proposes to adjust that number downward by 15% (since non4

https://www.trademap.org/Country_SelProductCountry_TS.aspx?nvpm=1%7c156%7c%7c%7c%7c8105%7c%7c%7c4%7c1%7c1%

7c1%7c2%7c1%7c2%7c2%7c1%7c1
12

hydroxide cobalt imports run at 10-20% of the total), resulting in an adjusted deliverable supply of 23,340 

MT per month (23,340 contract equivalents). The Exchange proposes a spot month position limit of 1,000 

contracts, equivalent to 4.3% of deliverable supply.