Global mineral prices fluctuate towards year-end

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Published: Wednesday, 30 October 2013

After weeks of relative market buoyancy, prices for rare earths slipped during the second week of October as reduced demand from buyers undermined recent gains.

By IM Staff

After weeks of relative market buoyancy, prices for rare earths slipped during the second week of October as reduced demand from buyers undermined recent gains.

Prices were around 5% down on their September averages, according to sources, with the more valuable heavy rare earths being among the hardest hit.

According to the Chinese media, dwindling downstream demand was compounded when expectations of a rare earths bid invitation - related to rumours of a planned government stockpile - fell through.

Recent indications from other markets, including bromine chemicals, high-purity graphite and precious tech-related precious metals, suggest that manufacturing of consumer electronics, and particularly display screens, slowed down in Q3.

Graphite

Softening demand from high-tech industries has put pressure on the price of tech-related graphite products, which failed to achieve anticipated price increases as the market entered Q4.

IM Data reported in early October that prices for flake, 97% C, -100 mesh - a grade generally consumed by high-tech or niche industries - sourced from Henan, China, were over 14% lower than at the start of Q3 2013.

IM Data also reported that prices for spherical graphite (99.95% C, 15 microns, FOB China) have fallen by around 5% due to weakness in lithium-ion battery markets.

In terms of the overall graphite market, there has been no significant change in demand, sources told IM Data, although some expect a slight upturn in sales over the coming weeks in anticipation of the winter slowdown.

Butyllithium

US-headquartered Rockwood Holdings Inc. announced at the beginning of October that its Rockwood Lithium division will implement price increases for butyllithium and other organometallics by approximately 4% globally from 15 October, as contracts permit.

“Prices for energy and raw materials, particularly solvent costs, have been increasing over the last 12 months, which makes this step necessary,” said Gerd Michael Kraemer, vice president global marketing and R&D for Rockwood Lithium.

Butyllithium is an organometallic compound used in the manufacture of synthetic rubber and plastics. Prices for the material can range between $10-1,000/kg, depending on the application.

Diatomite, perlite and calcium carbonate

EP Minerals reported a similar story in October, announcing its intention to implement a 5-7% price increase across all diatomite grades, effective 1 November 2013.

The US-based company added that it would also be increasing prices of perlite and cellulose products, and said that the increase will affect all regions.

EP Minerals said the price increases were “necessary to offset inflationary pressure in the industrial mineral business with increased costs in mining, regulatory compliance, labour and benefits, ore and hauling costs, packaging, freight and logistics”.

It added that it “expects that prices for key inputs will continue to increase over the next year”.

Earlier in the month, Imerys Carbonates North America said it was raising the price of its calcium carbonate products, effective 1 December, by 3-10%.

Surcharges for unique packaging configurations will also be implemented in addition to the price increases, the company added.

Imerys explained that the surcharges were necessary to minimise the increased packaging and shipping costs it has been experiencing.

Imerys’ European business, Imerys Performance and Filtration Minerals Europe, has also been hit by increased costs in freight, packaging and raw materials.

To offset the rise in energy costs, the company says it has no choice but to implement a system of energy surcharges across its range of European products.

Production has been particularly affected at the Imerys diatomite plant in Murat, France, and at the company’s Alicante celite plant in Spain.

The surcharge for products from Alicante will affect calcined and non-calcined grades depending on energy demand, and will be based on Brent prices $/bbl from the previous six months.

Murat products will be charged at €18.70 ($25.78*)/tonne, and the energy surcharge will be calculated monthly, with any changes implemented on the 26th day of each month.

Perlite products will also be subject to an energy surcharge, Imerys added, as well as the company’s modified alumino-silicate product, OpTiMat.

October energy surcharges have been confirmed by Imerys at €7.80/tonne for OpTiMat customers, and €6.10/tonne for perlite customers.

Iodine

South American iodine producers lowered their pricing ranges for spot and contract orders in mid-October.

Until recently, companies in the region had been reporting significantly higher prices than market participants in other parts of the world, with values close to the $60/kg mark.

However, large suppliers have now revised their ranges to $54-58/kg, hinting that slowing end market consumption and tougher deals as the market enters Q4 were behind the softening.

The new range is still slightly above prices reported from European and US market insiders who told IM that iodine values were stable between $42-52/kg, and that they expected prices to remain at this level for the rest of this year.

Potash

Potash Corp. of Saskatchewan Inc. reported a 45% year-on-year drop in third quarter profits in October as plunging prices, poor sales volumes and general market uncertainty took their toll on the company.

Earnings of $356m for the quarter were in line with the Saskatoon, Canada-based company’s recently lowered guidance. The potash market has been in flux since July, when Russian producer Uralkali exited its agreement Belaruskali and warned of lower prices.

The uncertainty has led customers to delay purchases, which is hitting the bottom line of the fertiliser producers.

The company’s average realised potash price was $307/tonne in Q3, compared to $429/tonne in the same quarter a year ago.

The bad news is not limited to potash, as prices for phosphate and nitrogen have also come down sharply over the last 12 months. Potash Corp., Agrium Inc. and Mosaic Co. have all issued recent profit warnings due to slow demand.

Antimony trioxide

For antimony trioxide, recent reports suggest that producers are continuing to hold off placing orders in the hope of securing lower prices for antimony metal.

Sources indicated to IM that the market has remained quiet during October as the impasse on antimony trading is yet to break.

Antimony metal standard grade II prices rose while standard grade I prices narrowed, while the price range for trioxide grade material remained largely stable, with some marginal narrowing upwards from the lower end, sources said.

Bromine

US-based speciality chemicals producer Albermarle Corp said recently that its attempts to raise the price of bromine products in 2013 have been given a mixed reception by customers.

In August the company raised the price of its n-Propyl bromide based products by 20% and its elemental bromine and hydrobromic acid products by 25% for Asian customers.

This was followed in September by a 15% hike in the price of its brominated flame retardants.

Responding to analyst questions during its Q3 earnings conference call, Albemarle’s CEO, Luke Kissam, said that its higher bromine prices had been received differently by different markets.

Kissam did not give any specific details on pricing, other than to state that values were now “well north” of the $3,000/tonne mark.

Market indications are that bromine prices could increase further before the end of the year.

*Conversions made October 2013