Speciality grades of minerals are expected to be the main
winners in terms of prices during the second half of 2014, as
demand for fine chemicals, batteries and niche mineral-based
products is outperforming consumption in traditional industrial
markets.
While this news is encouraging for
some in the lithium, graphite and magnesium hydroxide
industries, price appreciation for a small number of specialist
materials is not expected to compensate for price stagnation
and weakness seen in higher volume applications.
Antimony, iodine, refractory grade
magnesia and zircon producers all saw prices either stall or
weaken at the end of May and into June, although the troubled
fertiliser industry saw some positivity as potash prices began
to strengthen.
Antimony
Prices for antimony trioxide and
trioxide grade antimony ingot have been stable since mid-May,
prompting suggestions that the market has now settled ahead of
the summer months in the northern hemisphere, which are usually
quiet for trading.
Antimony trioxide (typically 99.5%
Sb2O3, 5-tonne lots) prices listed on the
IM Prices Database stand at $8,650-8,750/tonne
on a CIF Antwerp Rotterdam basis, while the same grade (20
tonne lots) is priced at $8,750-8,850/tonne FOB China.
US antimony trioxide prices
(typically 99.5% Sb2O3, ex-works) remain
higher at $8,900-9,100/tonne.
Meanwhile, trioxide grade antimony
ingot prices are in the range of $9,600-9,800/tonne on both an
FOB China and CIF Rotterdam basis.
Prices for standard grade II
antimony metal are currently $9,400-9,700/tonne, according to
Metal Bulletin.
On 8 June, China’s Ministry of
Land and Resources announced that it has cancelled the
country’s production quota for antimony this year Ð
the first time restrictions have been lifted since they were
imposed in 2009.
The purpose of the cap, which last
year limited Chinese output to 89,000 tonnes antimony, was to
prevent overcapacity in the sector. The removal of the quota is
unlikely to boost output, however, given that both prices and
demand are currently weak.
Lithium
Prices for lithium compounds
reportedly crept above 2013 averages in June, following months
of positive predictions by producers.
Sources told IM
that the price range for lithium hydroxide (56.5-57.5% LiOH)
has widened upwards to $7-8/kg from $7-7.2/kg in Europe. This
compares to an average range of $6.7-7/kg last year, according
to the IM Prices Database.
US prices for the same material
remain in the $7-7.5/kg range, meanwhile. This compares to an
average range of $6.2-6.7/kg.
Lithium carbonate prices are also
reported to be increasing, although they currently remain
within IM’s current ranges of $2.8-3.1/lb
($6-6.8/kg) for large contract orders delivered in the US and
$5-6.5/kg for orders (packed in bags) on a CIF Asia basis. This
range parallels average prices seen last year.
Economist Daniela Desormeaux,
founder of Chile-based signumBox, recently told
IM that rising demand from ceramic and battery
applications coupled with the pressure of rising costs were
helping to push up prices.
Desormeaux has however cautioned
that aggressive marketing strategies from major producers such
as Chilean miner Sociedad Quimica y Minera (SQM) could pull
lithium values down.
A US-based source who preferred not
to be named told IM that they did not think
SQM would bring prices down. “They don’t need
to,” the source said. “Plus, they’ve got their
production costs to think about - and it’s getting
more and more expensive to mine in Chile right now,” they
added.
Iodine
Iodine industry sources have told
IM that prices for iodine above $40/kg are now
“virtually non-existent”, bar sales for a handful of
small volume, highly specialised applications, after the market
softened further in recent months.
“Prices of around $38/kg seem
to be low enough to interest buyers, but generally suppliers
are not sitting on a lot of material now as values are so
low,” one Europe-based source told
IM.
Some Japanese suppliers are
reported to be sticking to prices of $40/kg, despite market
pressure to cut their offers, particularly since the Chinese
market has recently “gone very quiet”.
Rumours of prices below $38/kg were
also mentioned, although these were generally attributed to
dumping in Asia and were not considered to be reflective of the
wider market.
In May, SQM said that it expected
to see further price erosion for iodine this year, as it seeks
to regain market share lost to competitors in 2013.
However, the recently reported
problems at privately-owned local rival Cosayach, which saw its
director jailed for 61 days in May (see p14) over
abuse of water rights in Cala Cala and Negreiros, mean that
Chilean iodine output is unlikely to increase as much as had
been previously expected.
Sources still expect prices to fall
further this year, however, and said that the spot market is
currently tracking slightly lower than contract orders as
suppliers scramble for scarce business.
IM’s iodine
prices (99.5% min, drums) have been revised to $38-45/kg for
contract values and $37-40/kg for spot prices.
Magnesia
Prices for Chinese deadburned
magnesia (DBM) are reported to be stable, supported by steady
demand from large volume contract consumers in lieu of an
active spot market, after weakening significantly towards the
end of last year.
Export prices for 90% MgO Chinese
DBM fell by around a quarter in 2013 to their present level of
$255-270/tonne, from $320-350/tonne (FOB China).
Values for 92% min MgO Chinese DBM
fell by 10-30% to $320-400/tonne from $410-450/tonne and by a
similar magnitude for 94-95% MgO material, to $350-450/tonne,
from $450-480/tonne (FOB China).
High purity 97.5% MgO Chinese DBM
prices have fallen by around 15%, meanwhile, to $450-485/tonne
from $531-583/tonne (FOB China).
The downturn in the market for
Chinese DBM, which is mainly used in basic refractory bricks
and granular refractories, is a knock-on effect from the
decline in the global, and particularly China’s, steel
industry since 2009.
Although steel production appears
to be recovering in Asia, the US and Europe in line with wider
economic improvement, this recovery is yet to translate
upstream to raw material markets, pricing and production data
from DBM producers indicates.
Phosphate
New Zealand-based fertiliser
co-operative Ballance Agri-Nutrients Ltd reduced prices on most
of its fertiliser products at the end of May, citing softer
international prices for phosphate rock and urea.
The company, which imports
phosphate rock from North Africa, said the price of its
Superten product, which contains phosphate, sulphur and
calcium, has been lowered to $315/tonne from $327/tonne,
effective 30 May.
IM’s prices
for North Africa-sourced phosphate (70-72% BPL, long-term
contract, FAS Casablanca, Morocco) currently stand at
$100-110/tonne.
Ballance also said that increased
international manufacturing of di-ammonium phosphate (DAP) had
contributed to lower prices of $775/tonne, down from
$850/tonne, while high global stocks of urea, particularly in
China, had caused prices to drop to $605/tonne from
$645/tonne.
Although the price of core
ingredients like phosphate have fallen, Ballance noted that
boron and magnesium sulphate prices have increased. These rises
have not been enough to push up finished product prices,
however.
Price indications for fertiliser
minerals from large importers like New Zealand are significant
markers of international market trends. New Zealand currently
has no significant domestic phosphate production, buying in
most of its supply from Morocco, Christmas Island and
Vietnam.
Potash
PotashCorp. of Saskatchewan
announced in mid-June that it would rescind layoff notices
affecting 50 workers at its Penobsquis, New Brunswick, facility
in Canada due to “ongoing tightness” in the granular
potash market.
The layoffs at Penobsquis were part
of an overall 18% reduction of PotashCorp’s workforce,
affecting more than 1,000 jobs, announced in December, as it
struggled with slumping demand and weak prices for the
fertiliser mineral.
PotashCorp.’s announcement
came shortly after the company published data showing that
North American potash production hovered around 1.7m tpm
between March and May this year, compared to output of roughly
2m tpm during the same period in 2013 - a drop of
13-15%.
Sales for North American producers
have been around 300,000 tpm higher than last year from January
to April, meanwhile, and North American potash supplies dipped
in May to 2.35m tonnes, their lowest level since September
2012, while inventories were 19.7% lower year-on-year.
This has created a tightness in the
market that is lending support to prices, which have recovered
marginally in the Vancouver export market from a six-year low
of $300/tonne, according to PotashCorp.’s data.
IM’s prices
for granular potash muriate (KCl, bulk, ex-works, North
America) stand at $310-370/s.ton. Standard potash muriate (KCl,
bulk, FOB Vancouver) also stand at $310-370/tonne.
Soda ash
The decision by soda ash producer
Solvay Chemicals Inc. to increase its prices by $14/s.ton for
North American products has prompted market participants to
call for the opening of 2015 contract negotiations.
Solvay said that the increase,
which is effective from 1 July 2014, or as contracts permit, on
an FOB basis, is “in order to support the continuing
demands on our soda ash business [and] investments aimed at
maintaining and improving our supply, while continuing stable
mining”.
The company added that list prices
would not exceed $289/s.ton for bulk orders; $354/s.ton for
50lb (22.7kg) bags; and $344/s.ton for 100lb (45.5kg) bags and
bulk bags.
The increases, which were announced
at the beginning of June, have given rise to speculation that
rising demand for soda ash will translate into higher prices
later this year, although contract negotiations could limit
increases.
For 2014, soda ash producers won an
increase of around $7/s.ton for contracts in the US, less than
half the $15-20/s.ton originally sought when negotiations began
in 2013.
Industry sources told
IM that although soda ash consumption is
increasing in North America, it was not clear whether this
market or foreign markets would support significantly stronger
prices.
In May, rival US producer FMC
Corp., which runs a soda ash operation through its subsidiary,
FMC Wyoming, said that it believed prices were firming up both
domestically and internationally.
In response to analyst questions
during its first quarter earnings call, FMC’s CEO, Pierre
Brondeau, hinted that a 10% increase in the price of soda ash
this year was not unrealistic.
“The 10%, on average price
would be something in between $10 and $15/tonne,” he
elaborated.
IM’s prices
for US soda ash are $275-290/tonne (natural, dense, list price,
FOB Wyoming); $330-335/tonne (natural, large contracts, FOB
Wyoming); and $245/s.ton (natural, light, list price, bulk, FOB
Wyoming).
Rare earths
A reduction in the level of rare
earths smuggling from China together with improvements in the
global manufacturing sector are expected to support rare earths
prices this year.
Recent manufacturing surveys have
indicated stronger industrial output in China and that makers
of glass, catalysts and phosphor products are increasing
production volumes and raw material consumption, in step with
the recovering global economy.
Market sources have indicated that
prices for the lowest value light rare earths - cerium and
lanthanum, which are mainly used in polishing powders and
phosphors Ð are still weakening, but are expected to bottom
soon, close to their current price ranges of $5-6/kg.
Prices for rare earths used in
magnet production, including praseodymium, neodymium and
samarium, have been volatile in recent months as speculation
over increased demand for electric vehicles, which use magnets
in their motors, caused prices to surge and fall back again on
a week-by-week basis.
IM’s prices
for praseodymium oxide currently stand at $110-120/kg, while
prices for neodymium oxide are in the $60-70/kg range and
samarium is priced at $5-7/kg. Market sources expect these to
rise by around 10%, on average, in the second half of 2014.
Zircon
Prices for zircon softened slightly
as the market entered June, but industry participants expect
that prices will remain at current levels until at least
July.
Offer prices for Australian zircon
sand (min 66% ZrO2, bulk, CIF) are reported to be
between $1,200-1,300/tonne, with suppliers settling for prices
at the lower end of the $1,200-1,250/tonne (CIF) range for
large volume orders.
Prices for Indonesian zircon sand
(min 66% ZrO2, bulk, CIF) are around
$1,150-1,200/tonne, meanwhile, slightly above China where
prices have slipped below $1,100/tonne, although dwindling
producer inventories and reluctance to sell is reportedly
stopping prices from falling further.
Chinese producers are also said to
be standing firm over prices as margins are under pressure from
high operating costs and the recent softness in selling
values.
*Conversions made June 2014
If you wish to discuss any of the
prices or grades listed in IM, please contact Laura Syrett,
Prices Editor, at lsyrett@indmin.com.
For in-depth fluorspar and graphite prices, visit the
IM Data pages online.
ONE TO WATCH
Iodine
Prices for iodine are already around $38/kg, down from
around $60/kg a year ago. Producers fear the market has not
bottomed yet.
ONE TO WATCH
Soda ash
Buyers’ responses to promised price increases by major US
soda ash producers are likely to limit rises in this market,
even though North American soda ash consumption is reported to
be growing.