Demand in most mineral markets continued to be flat to weak
in January, with fluctuations in prices driven almost entirely
by changes in Chinese production activity and policies.
Preparations for Chinese New Year
on 31 January and the accompanying Spring Festival saw mine and
plant closures across several industries, including antimony,
fluorspar and graphite, which tightened supplies and prompted
price increases for chemical grade antimony metal.
Weak cathode consumption by battery
makers led to a softening in lithium prices, meanwhile, and
ongoing lacklustre demand for iodine saw both spot and contract
prices drop in recent weeks.
In more positive news,
Uralkali’s Chinese potash contract for the first half of
2013 has laid a reassuring benchmark for the industry, which
should keep prices for the fertiliser mineral above $300/tonne
in the near term.
Antimony
Trioxide grade antimony ingot
prices in China rose in mid-January as smelters closed down
production lines ahead of the Chinese New Year holiday, sources
told IM.
“The price is going up slowly
in China; most of the mining companies have stopped work
because the Spring Festival is coming,” one China-based
supplier said.
“Demand is going up slowly, so
the price is also beginning to move to up slowly,” they
added.
An upturn in orders from Europe and
the US was met by reduced availability of material from China
as a result of production line closures.
Chinese producers have been
standing firm on offers since before the end of 2013, resisting
pressure to sell material at or below cost, despite weak end of
year market conditions as buyers held out for the cheapest
deals.
This led to an unexpected surge in
prices for trioxide grade antimony at the end of December, when
buyers thought that prices had bottomed and placed large orders
to take advantage of low priced material.
In-warehouse Rotterdam antimony
trioxide grade metal prices stood at $9,600-800/tonne on 23
January, up from $9,500-700/tonne a week previously.
European trioxide (typically 99.5%
Sb2O3, 5 tonne lots, CIF
Antwerp/Rotterdam) prices fell slightly, meanwhile. Sources did
not give an explanation for the decline, but said that prices
stood at $8,800-900/tonne, down from $9,000-200 tonne earlier
in the month.
Chinese antimony trioxide
(typically 99.5% Sb2O3, 20 tonne lots,
FOB China) prices were steady, meanwhile, at
$8,600-800/tonne.
Standard grade II antimony metal
prices had also increased to $9,500-800/tonne by 23 January,
from $9,400-600/tonne, according to Metal
Bulletin.
Fluorspar
In fluorspar markets, demand
remained weak in January, according to information received by
IM Data.
“While some have reported
lower prices out of China, IM Data has not
received substantial enough feedback to change our prices at
present,” the data service said.
Graphite
Graphite prices were also quiet for
much of the month, although prices in China may be edging
up, according to some IM
Data sources.
Prices remained within
IM’s ranges in January, but this may
change as supplies run low China’s Spring Festival
approaches.
Few are expecting any increases to
be more than 5-10%, however.
Iodine
Prices for iodine fell again in
January, sources indicated to IM, with large
volume and contract orders showing the largest declines in
value.
The fall in prices was attributed
to a further weakening in downstream demand and competition
between suppliers to secure high volume orders.
Iodine producers in Chile are
reportedly looking to cut supply in line with reduced
consumption.
South American sources reported
that prices for iodine crystal (99.5% min, drums, spot and
contract) had narrowed downwards to a range of $45-50/kg from
$45-55/kg in December.
Other sources have suggested that
values for large contracts may have slipped even further to
settle below $45/kg, although precise prices for such shipments
are unlikely to be publically disclosed.
Smaller orders for specialist and
fine chemical applications are thought to be holding up in the
$50-55/kg range, however.
Market participants believe that
the market could be approaching a floor in the mid-$40s,
although previous estimates had placed this floor at around
$50/kg.
Lower prices are not expected to
impact demand, however port strikes in central Chile, which
have hit metal exports from the country, could affect the
availability of iodine as early as Q2 if the action spreads to
the northern ports, used to ship the mineral.
Lithium
Torpid downstream demand for
lithium products has kept prices for lithium carbonate flat,
while weaker conditions for lithium hydroxide have pushed
prices down, IM has learned.
Battery grade lithium carbonate is
used to make cathodes for lithium batteries, but Chinese
producers have reported reduced consumption of these components
owing to a slowdown in domestic manufacturing.
Lithium carbonate buyers are
holding off from replenishing inventories as a result.
The price of Chinese sourced
battery grade lithium carbonate (99% min) stood at Chinese
renminbi (Rmb) 39-41/kg ($6.38-6.81/kg*) in the second half of
January.
Industry grade material remained in
the Rmb 35-37/kg ($5.70-6.10/kg) range, meanwhile.
Prices for lithium carbonate show
no sign of strengthening in the near future as the spot market
remains inactive ahead of the Chinese spring festival, market
reports indicate.
Values for lithium hydroxide
(56.5-57.5%), which is mainly used in greases, have suffered
more as a result of the weak downstream market, with prices
falling slightly from the Rmb 40-42/kg ($6.55-6.90/kg) range to
Rmb 39-41/kg ($6.40-6.75).
Chinese suppliers have reportedly
lowered prices in order to sell material, but the market for
lithium hydroxide remains subdued, with buyers continuing to
order on a hand-to-mouth basis.
Magnesia
Quiet market conditions during the
last week of December and first week of January have left
Chinese and European dead burned magnesia (DBM) prices steady,
IM has learned.
Prices for DBM (90% MgO, lump, FOB
China) were in the $240-270/tonne range in early January,
sources confirmed to IM, while values for
purer material (97.5% MgO, lump, FOB China) were between $470
and $490/tonne.
At the beginning of December 2013,
Europe-based sources told IM that some grades
of Chinese DBM had slipped as Chinese producers dropped prices
in an effort to sell the remainder of their export quotas
before the end of 2013.
Market indicators suggest that this
effect was only marginal, however, and mainly confined to
higher value DBM grades.
European prices, which are
typically around 10-15% higher than Chinese FOB values, were
also steady after the Christmas holiday lull, sources told
IM.
Prices for Europe port DBM grading
at 90% MgO were reported as being between $275-285/tonne; 92%
MgO material at $295-305/tonne; and 95% material at
$415-425/tonne.
North American DBM prices are down
slightly, however, with average values for 95% MgO material
reported to be between $530-550/tonne, down approximately
$10/tonne from mid-2013.
Reports from Chinese operators have
said that both spot market and contract enquiries have been
slow to get going, with buyers holding off from making
purchases to see which direction prices will begin to move this
year.
While Chinese market participants
have suggested that prices could strengthen from February as
market activity begins to pick up, North American sources have
said that there are few signs that prices will increase as
demand conditions for the refractory mineral remain
difficult.
China and Europe-sourced caustic
calcined magnesia (CCM) prices were steady meanwhile, sources
indicated, with Chinese CCM (90-92% MgO, FOB China) reported as
being in the $235-245/tonne range, and European offers at
around $265-275/tonne.
Fused magnesia prices were also
reported as flat.
Potash
The world’s largest potash
producer, Uralkali, reduced its Chinese contract price for the
fertiliser mineral by almost a quarter year-on-year (y-o-y) on
20 January.
The Russian miner set the price at
$305/tonne for the first half of 2014 for a supply volume of
70,000 tonnes, a value 24% less than the $400/tonne contract
that expired in July between China and Belarusian Potash Co.
(BPC), Uralkali’s now defunct trading arm.
Uralkali’s contract with
China, the world’s largest potash consumer, is seen as a
benchmark by the bulk of market participants.
Setting this at above $300/tonne
should lift the rest of the market, which weakened considerably
after Uralkali pulled out the BPC trading venture with
Belaruskali in August 2013.
Chinese spot prices for potash fell
to $303-305/tonne, Uralkali marketing chief Oleg Petrov said in
December. The company also said that average FCA export prices
in Q3 2013 had fallen 27% y-o-y to $272/tonne.
On announcing the China contract
price, Petrov expressed an optmistic view of the market:
“The contracts between Uralkali and the Chinese companies
clearly testify to growing demand and the beginning of market
recovery,” he said.
“The terms of the agreement
with our Chinese partners are mutually beneficial and serve the
interests of our consumers, agricultural producers of the
PRC,” he added.
“Any deal at a price higher
than $300 is a success for Uralkali,” Konstantin Yuminov,
a Raiffeisenbank analyst in Moscow, told
Bloomberg.
A reconciliation between Uralkali
and Belaruskali has been mooted by analysts. A reformation of
the trading scheme could see prices lifted further, as greater
certainty returns to the potash industry.
Rare earths
Prices for rare earth minerals
increased slightly in early January after ending 2013 on a low,
if steady, note, having lost ground made up during a brief
market rally in November.
Internationally traded prices for
cerium oxide increased from a range of $4-6/kg to between
$5.40-6.80/kg, while dysprosium oxide has risen from
$310-350/kg to between $450-525/kg, values quoted by Chinese
sources indicate.
Lanthanum oxide prices rose from
$4-6/kg to $5.60-6.20/kg; neodymium oxide prices increased from
$40-60/kg to $69-72/kg; and praseodymium oxide prices were up
from $75-90/kg to $120-134/kg.
All prices quoted were for minimum
99% pure material on an FOB China, bulk basis.
At the beginning of the month, the
Chinese government approved a plan to consolidate China’s
rare earths mining sector which saw the country’s largest
producer, Inner Mongolia Baotou Steel Rare Earth Hi-Tech Co.,
take control of nine smaller mining companies.
These policy changes have prompted
speculation that the reforms could underpin higher rare earths
pricing in future by increasing domestic values for the
minerals and tightening their global supply.
Titanium dioxide, rutile
and zircon
ASX-listed Iluka Resources said in
mid January that it had seen a material reduction in prices for
zircon and high grade TiO2 products in Q3 2013
(See p 16).
“Zircon prices commenced 2013
materially lower than 2012 levels and remained stable for much
of the year before softening slightly in the fourth quarter,
with a resultant weighted average annual zircon price for 2013
of $1,150/tonne, a reduction of approximately 45% y-o-y,”
Iluka said.
“Weighted average rutile
pricing declined during 2013 by approximately 56% to
$1,069/tonne, associated with the weak demand for high grade
titanium products,” it added.
The company also said that zircon
sand inventories held by customers fell to low levels towards
the end of last year, with buyers continuing to order on an
“as required” basis and with some holding back from
purchasing as prices softened marginally.
“As the traditional low season
has commenced (December to Chinese New Year) muted buying
activity is expected until February 2014,” Iluka said.
In high grade TiO2
markets, encompassing Iluka’s rutile, synthetic rutile and
upgraded slag products, which mainly supply chloride pigment
producers, these buyers continued to be burdened by high
inventories built up in 2012, Iluka explained.
This has meant that demand for
higher grade feedstocks remained subdued in late 2012 and
throughout 2013, and Iluka said its received rutile prices were
around $900/tonne in the December quarter.
Full information on all
IM’s prices can be found on the
IM Prices Database.
*Conversions calculated January
2014
ONE TO WATCH
Chinese DBM
Prices for dead burned
magnesia (DBM) (90% MgO, lump, FOB China) are not expected to
move until after the Chinese Spring Festival, but market
participants expect buying activity to pick up from
mid-February, which could boost prices.
ONE TO WATCH
Dysprosium
Prices for dysprosium
fluctuated along with other rare earth minerals in 2013, but
experts have repeatedly tipped this heavy rare earth as being a
target for growing future demand.
Chinese-sourced heavy
rare earths are mined in the country’s southern provinces
of Hunan and Jiangxi, and in January the Jiangxi government
announced it would impose price-based taxes on rare earths
later this year, which could affect mineral
values.
ONE TO WATCH
Iodine
Market commentators are
expecting the price of iodine (99.5% min, drums, contract) to
bottom within the coming weeks, although constrained supply as
a result of Chilean port strikes could push prices higher
temporarily.