It has not been a good year for the
industrial minerals industry. There have been some shining
lights, of course Ñexploration continues at an
astonishing rate in some markets despite falling demand and,
consequently, prices Ñ but on the whole producers and
suppliers have felt the pinch.
One thing that is clear, however,
is that there are still moves being made in the industrial
minerals space.
Frac sand
The frac sand market experienced a
turbulent 2013 as environmental concerns continued to hamper
new development. This led to several moratoria being put in
place across the US, but did not prevent a significant amount
of new activity taking place in North America as well as
further afield in Europe, the Middle East and China, which is
discussed on pages 54-55.
Kaolin
Meanwhile, in kaolin markets
(p47), the ongoing consolidation of the industry was
questioned in 2013 as Imerys’ purchase of the last
independent UK kaolin producer, Goonvean, was referred to the
Competition Commission (CC). After months of waiting, and a
provisional ruling that the merger could lead a loss of
competition for some UK customers, the CC finally ruled that as
the merged company would be the only UK supplier to tableware
manufacturers, it would be subject to a price control.
Agrimarkets
In agrimarkets, things started
looking up. Specifically, in the potash market, as January 2013
as the potash stalemate was ended with the signing of new
Chinese contracts - albeit at heavily discounted rates -
however, the rest of the year was an upward struggle for the
industry.
Despite assurances by producers
that demand was picking up, this was not reflected in company
results throughout the year, which mostly showed lower volumes,
prices and profits. India also remained a problematic market
throughout the year.
In July, Russian producer Uralkali
sent shockwaves through the potash industry by announcing it
would withdraw from its partnership with Belaruskali and that
the increased competition would cause prices to plummet to
$300/tonne. Although the price drop failed to materialise,
companies suffered as shares plunged and buyers held off on
contracts throughout the rest of the year.
While the potash market showed
stronger demand at least for the start of 2013, the phosphate
market stalled slightly.
A report from US producer
PotashCorp. published midyear said that the market had been in
a holding pattern as prolonged discussions around Indian
phosphoric acid and diammonium phosphate (DAP) contracts caused
many buyers in other regions to wait for more clarity.
The fact that India makes up one
third of the phosphate customer base remained the biggest issue
faced by the market, which was exacerbated by the devaluation
of the rupee and the price subsidy issue. Towards the end of
the year, the situation only worsened with Uralkali’s
shake-up of the potash market causing distributor caution
regarding potash to spill over into phosphates, causing further
delays to purchases.
Battery
minerals
Elsewhere, in lithium and graphite
markets the last 12 months have been marked by more exploration
and advances in the graphite and graphene space, while lithium
has survived one bad headline after another.
Progress is being made in
lithium-ion battery markets (see p8) which affects
demand for graphite and lithium, but this was also the year
that Boeings Dreamliner aircraft was grounded and the year that
has seen the most negative headlines around these markets as
prices have stagnated or weakened.
Graphite markets meanwhile seem
focused on growing demand and new innovations in graphene,
which this year moved closer to commercialisation.
Refractory
minerals
In refractory markets, demand has
stayed low, despite a report which came out in April which told
the market demand would receive a boost.
World Steel Association
(worldsteel) said in its Short Range Outlook for 2013 that it
expected demand for steel would increase by 3.2% to reach 1.5bn
tonnes.
However, at this year’s
56th International Colloquium on Refractories in
Aachen, Germany, manufacturers told IM about
the distance between so-called growing steel production, the
main market for refractory products (which, actually, is up
year-on-year), and their order books.
In magnesia, while 2013 saw RHI
marred with technical problems at its fused magnesia plant in
Norway, but it hasn’t really mattered, as markets have
remained bearish and demand low. Elsewhere, Magnesita has
continued to plug away with its vertical integration strategy,
by buying a refractory products plant in China and continuing
with its graphite mining project in Brazil.
In bauxite and alumina markets, 2013 saw the emergence of a
new tabular alumina producer in Zili Corp. (see
IM December issue) and a move away from
fused alumina in preference for the tabular variety. Bauxite
markets, meanwhile, remained dogged by lacklustre demand, but
also uncertainty as Indonesia moved to ban all exports of raw
mineral ores and China is looking to significantly clamp down
on those companies exporting at a lesser value than bought on
the market (see IM November
2014).
All currency conversions over
the following pages were made on the month stated, in
2013.