PRICE BRIEFING: Zircon marches on; chromite, graphite and soda ash prices expect H2 boost

By Siobhan Lismore-Scott
Published: Tuesday, 28 June 2011

Market prices for zircon are expected to increase on bullish market fundamentals, market sources told IM, emphasising that “there may be no end in sight”.

  • Zircon
  • Chromite
  • Graphite
  • Soda ash
  • Potash

Zircon, TiO2, fused zirconia

Market prices for zircon are expected to increase on bullish market fundamentals, market sources told IM, emphasising that “there may be no end in sight”.

Supply has tightened primarily because demand from China has increased. Also, China has clamped down on poor practise in zircon processing plants, which has tightened the market further.

Instances of smuggling are still widespread, according to market sources. One trader said that the trade ban between Vietnam and China has been “largely ignored.”

Tighter supply could be one of the reasons Cristal Global is increasing prices on all of its rutile and titanium dioxide (TiO2) products sold in Europe, the Middle East, Africa, Latin America and the Asia Pacific sub regions.

The price increases, which will come into effect on 1 July, affect all of the company’s anatase and rutile Tiona products as well as all TiO2 products, Cristal emphasised.

Producers of fused zirconia have raised prices for the third consecutive quarter this year in direct response to the soaring increase of zircon sand.

A fused zirconia producer told IM: “We have had to raise our prices simply to recover the cost of zircon sand. The market is becoming very weary of these quarter to quarter increases but we have no choice.”

“Everyone thought that zircon prices would level off at $2,000/tonne but they just keep on climbing. Now people are saying that prices may rise to as high as $3,000/tonne by the end of the year. It’s crazy; not even oil prices have increased at the same rate”, said the source.

Th world’s largest mineral sands miner, Iluka Resources, plans to raise rutile and zircon prices to record levels in the second half of 2011, far surpassing the expectations of several industry analysts.

Iluka said the average first half prices for the titanium dioxide (TiO2) feedstock rutile is about $770/tonne (FOB Australia), meaning H2 prices could reach record levels of $1,309-1,348/tonne.

Synthetic rutile (SR) will be increased by the same percentage, raising prices to $1,088-1,120/tonne from a first-half average of $640/tonne.

Iluka said third quarter discussions with zircon customers were “progressing satisfactorily”, with price hikes of 35-40% expected to be achieved for the three months starting 1 July.

The increases would bring the average price of zircon to $2,160-2,240/tonne from a second quarter average of $1,600/tonne.

Chromite

Chromite prices remain stable but sources anticipate that the market may firm in the second half of the year.

“We expect prices to remain firm in these categories and possibly increase somewhat in the latter half [of the year] as continuing cost increases in South Africa and weakness in the US dollar push producers to increase prices in all non-metallurgical grade material,” a producer told IM.

“In addition, the possibility of weakening demand in metallurgical grade production may tighten supply for non-metallurgical by-product,” he said.

Elsewhere, another source said that the market would likely see increases at the start of July.

Graphite

Graphite prices within China are expected to increase further, warn market participants, with one source putting the price of amorphous powder up by between 15-20%.

Amorphous graphite, which is the lowest value graphite and used in foundry, has traditionally been regarded as the most abundant of the natural graphite group. But supply is expected to tighten this year, the market source reported.

Also contributing to the price rise is the fact that China has raised the minimum price for exporting graphite from certain ports.

Soda ash

European soda ash prices have been assessed higher ahead of the changeover to the third quarter.

The new price rise takes the price of soda ash from a price range of €170-€200/tonne (synthetic, dense and light, small parcels, list price, ex-works) in Europe, to €195-€235/tonne.

This is an increase of 17.5% from the level for the last two years.

Large contracts of soda ash (synthetic, dense and light, ex-works) have increased to Û165-Û185/tonne, from Û150-170/tonne - an increase of 9%.

Potash

The price of potash exported from North America has risen significantly in recent months driven by robust agricultural markets and strong demand.

Market sources disagreed on exact figures, citing prices for potash (FOB Vancouver) between $460/tonne and $550/tonne, although opinion was unanimous that there have been significant increases.

“Potash prices have increased incredibly recently. Prices for potash, FOB Vancouver, are as high as $550/tonne. The cost on top of that to get it to Brazil will be another $100. Blenders in Brazil then are looking at $650/tonne of potash,” one market analyst told IM.

The source said that a sustained high level of demand and the appreciation in prices for agricultural products were driving the increases.


Zirconia, fused, monoclinic, refractory/abrasive grade, contract prices,
CIF main European port, $/tonne




Solid lines = top of range; broken lines = bottom of range


Zircon, premium grade, bulk, FOB Australia, $/tonne



Solid lines = top of range; broken lines = bottom of range