Price Briefing: Barytes market reports bull trend as taxes bite in China

By Siobhan Lismore-Scott
Published: Monday, 23 July 2012

Barytes up while graphite market softens and a rare earth platform hoves into view

Barytes

Chinese paint-grade barytes prices are reportedly rising to a range of $300-320/tonne, market sources told IM.

A previously reported price range of $235-290/tonne (lump, CIF Gulf Coast-basis) is becoming increasingly “unworkable”, suppliers in China said, a view supported by Europe-based importers.

China accounts for around 52% of global barytes production followed by India, the US, Morocco and Mexico, according to the Barytes Association. With the monsoon season approaching in India, a supply disruption is expected and this is being widely factored in to some Chinese quotations.

“Supply disruption in a key competing market is likely to make short-term price stability difficult to achieve. For Chinese exporters of high-grade barytes, this is a window of opportunity. With no decrease in demand, the market should expect price increases to continue,” one source told IM.

This could be further fuelled by domestic taxes and tariffs in China. Apart from paint-grade barytes, the mineral is mainly used in the composition of high-density drilling mud for oil and gas exploration.

“Paint-grade barytes are high grade meant for premium-end industry usage in paints and plastics. As such, they remain niche. Their price movement is much more sensitive to supply- demand permutations,” a second market source said.

Barytes for drilling

Most market sources seem to agree that crude barytes prices out of China were in the $146-$158/tonne range reported by IM last month. Meanwhile, the Indian crude-barytes price, ground, FOB Chennai-basis, is at the $160-170/tonne range, according to sources.

Indian state-owned minerals exporter Andhra Pradesh Mineral Development Corporation (APMDC) recently issued a new 36,000m tpa tender for barytes powder.

The company, which will deliver the material from its Mangampet barytes project in southern India, said the powder will hold specific gravity of 4.20, and be sold on an ex-plant basis. The tender will run for two years.

India is the second-largest producer of barytes and price estimates range between $160-170/1.5 tonne (API, ground, FOB Madras).

Severe rains this May in southern China, where a large proportion of its barytes output is produced, could lead to a future tightening up of supply, a third source said.

Graphite

IM
received contrasting reports on graphite pricing in July. While differing figures make it difficult to accurately gauge trends, the general feeling is that the market for all grades is softening.

North American and European sources agreed that prices for graphite had generally fallen, but added that the supply-demand balance was better for large (+50 mesh) flake graphite because Inner Mongolia, traditionally a major source of the material, was only producing small amounts of graphite after two full years of zero production.

A South American source said that average prices were broadly similar to those quoted on IM’s pricing database for June, and there was no concerned about any imminent price drop.

There was some price fluctuation quoted in euros owing to continuing uncertainty over the currency, but local South American prices were stable, the source added.

An African graphite buyer said that the prices it had been paying had been the same level since this January.

Rare earths

News that China may begin to stockpile dysprosium and terbium (see page 11) led to some speculation that the two elements may experience a price uptick.

However, not everyone was convinced in the longevity of the perceived bull run.

Following the news, the domestic price of dysprosium gained $313,500/tonne (Rmb 2m/tonne) week-on-week. Meanwhile, europium prices rose by $783,720/tonne over the week to $1.10m/tonne.

Low downstream demand, meanwhile, has affected the cerium market, as polishing powder producers face a production halt.

Companies which process cerium for use in polishing applications are reporting that they are working at less than 50% of capacity as supply outstrips demand.

However, oxide exports in May more than tripled month-on-month. Data also suggests that year-on-year exports are up 19%, to 6,000kg.

In November last year producers told IM that they would look into alternative polishers as cerium prices rocketed. This, producers said, would be almost impossible to reverse.

The amount of lanthanum shipped from China in May almost doubled month-on-month to 46,102kg, but was still down 89% year-on-year.

It is estimated that exports in all rare earths in June will fall back dramatically.

Iron oxide

US pigment manufacturer, Rockwood Color Pigments and Services, has announced a global price increase on all synthetic iron oxide pigment products.

The increase is effective from 1 August 2012, and Rockwood customers will be contacted individually by their sales organisation, the company said.

Prices of iron oxide pigments (red type 130 90% Fe2O3, bagged, FOB China) currently stand at between $1,431-1,637/tonne.

Soda ash

US soda ash producer FMC Wyoming Corp. has also upped prices, saying in July that it would be increasing off-list soda ash prices by $10/s.ton as of 1 August.

The price increase was “necessary to recover cost increases and to support investment in the business”, FMC Wyoming said and will be applied to all grades.

FMC Wyoming, a subsidiary of FMC Corp., underlined that its current energy surcharge and freight policies for soda ash will remain in effect. The energy surcharge base cost will remain $7/mmBTU.

Bulk soda ash list prices (FOB Westvaco or Granger, Wyoming, railcar and hopper truck) will remain at $275/tonne for dense; $280/tonne for Grade 100TM; and $290/tonne AbsorptaPlusTM.

Packaged soda ash list prices will remain at the current level of $340/tonne (FOB Westvaco, Wyoming) for 50 lb and $330/tonne for 2,000 lb packages.


Barytes