What is Cobalt?
Cobalt is a chemical element and is found only in the chemically combined form in the earths crust, from natural meteoric iron and alloys.
Uses of Cobalt
Cobalt is also used in the blue colouring of:
Cobalt's main use is in the composition of some metals and high strength alloys.
Risks of Cobalt
With any commodity derived from mining the earths surface, there is the risk of how much it costs to extract the compound. If these costs outweigh the demand then production will decrease if not halt.
With any futures contract, there is always the possibility that the underlying asset i.e. cobalt will move in the opposite direction to which you hold your contract. For example: you have taken a long position (expecting the price of cobalt to rise), if this were to happen and the cobalt fell in price, your long position in cobalt will decrease in value.