By IM Staff
The fall-out from a sombre round of second quarter earnings
continued to be felt in mineral markets this month, with
producers in the chemicals sector, in particular, announcing
price increases to limit the impact of falling revenues and
The torrent of gloomy earnings news
continued with mining giants Rio Tinto and Vale announcing
results, as well as a host of smaller mineral companies which
joined in the chorus of profits under pressure.
August was a turbulent month for the potash industry, with
leading potash producer Uralkali pulling out of its export
sales arrangement with Belarusian Potash Co. (BPC), following a
disagreement on export activities.
A company spokesperson confirmed to
IM that competition in the potash market is
likely to increase with prices falling by the end of the year
(see pp 10-11).
[Increased competition] will
put pressure on the price that might go to under $300/tonne by
the end of H2 2013. Still the price is likely to remain higher
than $200/tonne, which is the cost of production for marginal
potash producers, the spokesperson said.
Responding to the stock market
volatility caused by Uralkalis announcement, Moodys
Investors Service has said that the market response had been an
overreaction, and that prices are more likely to fall to
To say that prices will go
down to $300/tonne is a very strong overreaction on the
price, Moodys assistant vice president, Sergei
Grishunin, told IM.
No one knows how prices will
behave. Any forecast of price is merely speculation. The only
thing we can say is that the volatility will probably increase
in the short term but in the long term I think all parties will
find a solution, he added.
Grishunin also said that should
prices drop to the levels Uralkali has suggested, they will not
remain there for long, and that pricing is expected to be
closer to $350/tonne over the medium term.
Fertiliser producer Israel
Chemicals Ltd (ICL) said the announcement may change
potash market dynamics and create pressure on potash
Spot prices for polycrystalline silicon (polysilicon) - one of
the main feedstocks used in solar cells - have contributed to
demand fluctuations for other industrial minerals, including
silicon carbide (SiC), IM reported in
In the first quarter of 2012 spot
prices of polysilicon were hovering around the $30/kg mark,
having fallen 60% in 2011 on the back of major
Analyst forecasts for 2012
predicted that prices would then fall further and reach a low
of at least $20/kg by the end of the year.
Spot prices did reach that
level in the fourth quarter; however they fell significantly to
around the $15/kg range before stabilising in December,
Mark Osborne, senior news editor at PV-Tech, told
Despite the negative impact
tumbling polysilicon prices have had on smaller producers, all
is not lost from a wider solar market perspective, according to
Fatima Toor, who works in Lux Researchs Solar Components
I think closure of the
smaller Chinese polysilicon companies is actually a good thing
for the industry since it will bring up the price of
polysilicon to a sustainable $24/kg to $30/kg in the next 12
months, she explained to IM.
The current sub-$20/kg prices
are not sustainable given that the cost of Siemens polysilicon
production is $20/kg to $25/kg for large players and for
smaller players around $25/kg to $30/kg, so any company selling
below $20/kg is not making any money in this business and the
overcapacity is dragging the entire industry down, Toor
Leading titanium dioxide (TiO2) pigment producer
Huntsman Corp. has said that it anticipates further price hikes
for TiO2 pigment during the year.
We are hopeful that we will
get more significant increases (...) towards the end of 2013
and into 2014, as inventories fall, CFO, J Kimo Esplin,
revealed to analysts this month.
However, Huntsman believes that it
will not require significant price increases to reach its
normalised run rate, and noted that TiO2 pigment
prices have begun to settle after a weak 2012 for pricing.
We are seeing price
stabilisation for TiO2 as a result of lower industry
inventories and improving demand [and] we expect margin
improvement in the second half of this year, said CEO
Elsewhere, titanium slag producer
TiZir Ltd saw its sales for H1 2013 rise by 11% y-o-y to 80,600
tonnes slag, produced from its Tyssedal plant in Norway.
Prices for titanium slag however,
continued to soften and during first half 2013, and were on
average 30% lower than full-year 2012 levels.
US-headquartered Chemtura Corp. said that prices for bromine
and bromine-based products continued to remain weak during the
June quarter of 2013 as a result of slow demand from
The company said that prices had
been particularly weak in Asia, where Chinese bromine producers
continue to have excess production capacity due to lower
The company anticipates demand for
bromine chemicals to increase in the second half of 2013,
however; there is limited visibility as what that rate of
improvement will be.
US speciality chemicals producer
Albemarle Corp. also announced this month that it will increase
prices for elemental bromine and hydrobromic acid (HBr) for
customers located in India, China and other parts of Asia by
25%, effective immediately.
Meanwhile, Chinese chemical
producer Gulf Resources Inc. said it had seen an upward trend
in bromine prices during the second quarter of 2013, despite
weaker demand from Chinas industrial sector.
Although still impacted by
Chinas macro-economic conditions, some raw materials
prices are increasing, the company said in its Q2
The average bromine price in
[the second quarter] increased to $3,084/tonne, compared to
$2,954/tonne by the end of 2012, Gulf outlined.