The London Metal Exchange is trying to extend its reach into the world of minor metals with contracts for cobalt and molybdenum, but success depends to an extent on consumers.

This is because they fear the price volatility of the contracts due to start trading in the second half of 2009.

Cobalt is used to make turbine blades for aircraft engines and electricity generation, while molybdenum's anti-rust properties make it a key material for stainless steel mills.

"Consumers are worried about the volatility that molybdenum contracts could create and I understand these concerns," said Catherine Virga, senior analyst at CPM Group.

"There are legitimate and not so legitimate reasons why consumers wouldn't be in favour of the contract."

Analysts estimate the molybdenum market is roughly around 195,000 tonnes or more than $10 billion, while the cobalt market at around 60,000 tonnes is worth around $5 billion.

Not all grades of cobalt and molybdenum will be deliverable against the LME's contracts, so the value of the contracts traded will be much smaller.

But the contracts can be used to help with the pricing of material that does not conform to LME specifications, said Chris Evans, a business manager at the exchange."There has been some negative comment, but there is also a lot of support from mining companies and consumers," he said.