Price Briefing: While other markets tremble, antimony leads the way

By Siobhan Lismore-Scott
Published: Monday, 01 October 2012

While rare earths, zircon and TiO2 feedstocks slipped in September, antimony trioxide prices showed some recovery.

While rare earths, zircon and TiO2 feedstocks slipped in September, antimony trioxide prices showed some recovery.

After suffering a downfall for the last few months, in September antimony trioxide and ingot prices rose, with market sources predicting positive market trends for the third quarter of 2012.

“Prices are up, and the forecast for Q3 is hot,” a Chinese source told IM.

Roskill Information Service said that recent volatility in the antimony market was likely to continue as prices rise.

According to a Roskill report, the price increases seen since 2010 are linked to growing consumption growth from the flame retardants and battery markets, which caused prices to peak in 2011.

The Global Industry Markets and Outlook (11th Edition) report, which was released in September, forecast that metallurgical markets would increase by nearly 2% per year as lead alloys experience growth from increasing use in construction applications in emerging economies.

Manufacturers split

China’s domestic antimony ingot market had shown minor activity with inquiries for future orders, but prices slipped slightly as demand from overseas customers fell.

Some manufacturers were introducing lower prices to buyers to maintain order levels, sources said.

But other manufacturers in China were holding stocks and were reluctant to sell at lower prices, other sources said in September.

Antimony prices are temporarily stable in Europe, but turnover for antimony producers continues to slump.

US-headquartered Advanced Metallurgical Group NV (AMG) reported that it had seen a 16% decrease in its antimony trioxide revenue for the second quarter of 2012.

Its antimony business, in particular, had been affected by the economic slowdown in Europe, and earning conditions would be “difficult”, with a previously anticipated H2 growth now not expected to materialise, AMG said.

Titanium dioxide market softening

The titanium dioxide (TiO2) market is continuing to soften, market sources indicated to IM.

“Pigment sales have slowed right down globally,” one source said.

“Either most, or all, producers have high inventory, and most are trying to slow down their incoming feedstock commitments,” the source added.

Leading paint manufacturers previously indicated that earlier 2012 price increases from pigment producers were not accepted, and with softness in the market, hikes like the one made by Kronos, were unexpected.

Kronos announced an increase of $200/tonne for all customers excluding North America and Europe, effective 1 September 2012.

But while the pigment market declines, the feedstock market remains buoyed.

“While the pigment market has shown signs of softening, the feedstock market remains firm amidst continued tight supply and low inventories,” one North American source said.

The Chinese market is also showing some signs of slowing, with ilmenite prices dropping on excess supply. The CIF China ilmenite price is in the range of $270-290/tonne, one source said.

Zircon prices teeter as Iluka and Rio Tinto hold auctions

In zircon, Iluka Resources Ltd and Rio Tinto Plc have both auctioned large quantities of zircon sand at reduced rates, sources said.

Rio Tinto auctioned roughly 15,000 tonnes premium grade zircon at around $2,000/tonne at the end of August while Iluka Resources auctioned 5,000 tonnes high-grade zircon at $2,150/tonne the day before, IM was told by market sources.

This is well under the previously offered price of $2,500-2,640 (premium grade, bulk, FOB Australia), as reported by the IM prices database.

However, these discounted prices are for limited quantities to be delivered next quarter, sources said.

This is indicative of the pricing pressure that the top tier producers (Rio Tinto, Iluka, and Exxaro) are experiencing, one source explained to IM.

Zircon sales, Iluka said in July, were heavily hit with a 40-60% drop in its sales forecast down to 200-300,000 tonnes for 2012. The company only sold 87,000 tonnes in the first half of 2012 and a large shipment was deferred due to port delays.

The result of this auction, sources indicated, is that many buyers are hesitating to commit to large purchases of zircon in case prices do fall further.

Some companies have also had to renegotiate their longer-term contracts with new price offerings that are between $2,050-2,300/tonne.

Rare earths slump on economy woes

Rare earths have continued to trade at a 12-month low with many buyers subsisting on stockpiles, sources told IM in September.

With weak demand for the minerals looking set to continue in the near-medium term, a price floor for the minerals has yet to be discovered, market commentators said.

Market sources said that the spot market for rare earths has been particularly hard-hit, with some of the industry’s biggest buyers (including electronics equipment manufacturers Apple and Hewlett-Packard, as well as aviation giant, Boeing) buying stock in advance.

This has left only smaller companies buying in the spot market, tendering smaller orders at lower prices.

Rare earths slip lower