After several years of low contract prices, 2018 looks set
to see acidspar contracts move up while the first deals are
settled in Europe well above $300 per tonne.
"There is an important inversion of the trend taking place,"
a buyer told Industrial Minerals before adding that all offers
he had received to date were well above $300 per tonne.
A reduction in global output, from China in particular
recently, combined with a rise in demand from
fluorspar’s downstream markets has led to the
increase in prices, buyers and sellers agreed.
While many had anticipated an increase after negotiations
began at the Industrial Minerals Fluorspar conference in
Amsterdam at the end of October, some have been surprised at
the level of increases while more deals near completion.
"It’s a definite sharp increase from where we
are this year. I did anticipate it, but not this much," a
second buyer said, adding that one Chinese supplier had told
him he wouldn't have anything available until mid-2018.
For further information on price increases seen in the
market this week please
But sellers looking to make-up for years of declines should
exercise caution before driving prices too high or selling too
much product to particular regions, the first buyer and a
producer told Industrial Minerals.
Global fluorspar production has been in decline for several
years (see Figure 1) and this combined with unexpected
production cuts from China in 2017 has led to a much tighter
While the output reduction of fluorspar and its downstream
products such as hydrofluoric acid (HF) and aluminium fluoride
3) in China has led to higher demand domestically,
producers and consumers outside of China cautioned against
committing too much material to China.
"If I fall into the temptation to sell everything to China
others could too and I will have no raw materials," the first
fluorspar buyer said, adding, "traders, the new comers, should
consider this. When the market goes up everyone goes a bit
HF and AlF3 prices have increased in recent
months, however, margins will be eroded by increasing fluorspar
prices, the buyer added.
How long the anti-pollution-related production cuts will
last in China is the key determining factor going forward,
buyers and sellers agreed.
Output is unlikely to increase between now and the Chinese
New Year in February, the majority of market participants
polled by Industrial Minerals said.
Production traditionally dips in the run up to national
holiday because weather conditions worsen and workers take time
off, a trader in China pointed out.
"While the long winter lasts, fluorspar production may stop
in middle or late January before the Spring Festival in
February comes, because usually factories will be closed for
holidays and workers will travel back to their hometowns in
advance, sometimes one month ahead of the festival. Therefore,
production may stop for over a month in China, then demand will
surely outstrip supply," the trader in south China said.
What will happen after the public holiday has the market
divided, however, with some suggesting prices will go down from
February onwards while others believe prices will remain above
$300 now that the "psychological barrier has been broken".
Negotiations will run into December this year while buyers
are in a position to hold back from settling contracts just
yet, in the hope of gleaning further market direction.