The fourth quarter of 2014 arrived
bringing with it scant comfort for producers of chemical-making
minerals, including antimony, iodine and mineral sands. Further
downward pricing pressure has been reported in these markets, a
trend blamed partly on falling Chinese consumption.
Titanium dioxide (TiO2),
in particular, evidenced no reassuring signs of a market
turnaround, while rising prices for refractory grade magnesia
came with the caveat that some markets were heading for
In the oilfield mineral industry, a
squeeze on the availability of barite (barytes) from India
narrowly missed the summer peak drilling season in the US, but
with no indication of new mining contracts being issued in
India, the oilfield procurement business remains in a nervous
Agriminerals - potash
prices continue to recover
North American prices for granular
potash increased in September to over $400/s.ton, market
List prices of $410/s.ton on an FOB
warehouse (ex-works) basis were reported for muriate of potash
(MOP), loaded onto trucks or railcars.
Prices and demand for standard
potash, which is a cheaper alternative nutrient preferred in
Asia and emerging economies, are also reported to be on a
positive trajectory, particularly given the late improvement in
the Indian monsoon rainfall levels.
Potash muriate (KCl, standard,
bulk) is priced at $350-410/tonne, FOB Vancouver, on the
IM Prices Database.
Granular potash is a more
expensive, premium quality type of the crop nutrient mineral,
for which the relatively wealthy regions of North America and
Brazil are among the largest global markets. Combined
consumption of granular potash in these regions is estimated at
about 16.5m tpa.
In its third quarter Market
Analysis Report released in mid-September, Canadian agrimineral
producer Potash Corp. of Saskatchewan (PotashCorp) said that
signs of a record harvest in the US, combined with tightening
supply conditions, are likely to support potash prices for the
rest of this year, despite a fall in crop prices.
"Crop prices have declined since
mid-May, mainly due to higher planted area and favourable
growing conditions in the US. However, we believe commodity
prices remain at a relatively supportive level compared to
fertiliser prices," PotashCorp said.
"In addition, we anticipate there
will be a large requirement to replenish nutrients removed by
this year’s crop," it added, forecasting that
shipments in 2014 will pass the 58m tonne mark.
Both Societe Generale and
Scotiabank have recently released reports predicting stronger
potash prices next year, based on robust market fundamentals
and overall growing demand for fertilisers.
Chemicals - antimony and
iodine on the slide
Trioxide grade antimony ingot
prices fell at the end of September as softness in the
downstream antimony trioxide market continued to impact
Sources in China reported that few
deals for antimony trioxide were concluded towards the end of
the third quarter. Prices in mid-September tumbled by around
Sluggish activity in the
construction and manufacturing sectors, where antimony trioxide
is used in flame retardants, has been blamed for the
Antimony trioxide (typically 99.5%
Sb2O3) prices stand at $7,750-7,850/tonne
(5-tonne lots) on a CIF Antwerp Rotterdam basis and at
$7,700-7,900/tonne (20-tonne lots), FOB China.
Prices for antimony ingot (99.65%
min) have dropped to $9,000-9,100/tonne from $9,100-9,200/tonne
on an FOB China basis and to 9,000-9,150/tonne from
$9,100-9,300/tonne, CIF Rotterdam.
Metal Bulletin reported
that prices for standard grade antimony were at
$9,000-9,200/tonne in mid-October.
The slide in iodine prices
continued to drag down the value of drums of iodine crystal
(99.5% min) in both spot and contract markets in October.
Demand was said to be quietly
steady, but buyers have a choice of material in the market and
are negotiating prices down, IM learned.
Based on market feedback,
IM assesses that prices now stand at
$34-39/kg, down from $35-40/kg, with the softness being led by
deals on Chilean iodine.
One US-based company told
IM it was still managing to close a handful of
small sales at around $42/kg, but admitted that the bulk of
deals are now being concluded in the mid-$30s range.
A producer said that, although the
market bottom has yet to be realised and prices have already
sunk lower than many would have predicted three years ago, a
market inflection could be due in the foreseeable future, which
will see values rise rapidly and without warning.
Deceleration in Chinese economic
growth and manufacturing activity is thought to underlie the
global softness in chemicals markets, although for iodine this
weakness is being exacerbated by aggressive marketing from
Participants in both industries
have reported that Chinese demand has fallen away over the
course of the year, with consumption in domestic markets and
exports retreating in the face of rising excess capacity.
China published figures indicating
a surprisingly strong trade performance for September, showing
an overall increase in exports of 15.3% year-on-year.
The data caused mining stocks on
the London Stock Exchange to rally in mid-October, but
discrepancies between China’s export statistics
and import figures from goods destinations (including Hong
Kong, which reputedly saw a 34% surge in exports from China),
raised doubts over the reliability of the numbers.
Fake invoicing to benefit currency
speculators has been suggested as a possible explanation for
the discrepancies, but this has done little to assuage fears
about China’s economic health and the effect a
decline will have on raw material prices.
Mineral sands - tough times
Delegates as the TiO2
World Summit 2014 in Montreal heard in early October that
prices for TiO2 pigment and its main feedstock
minerals, ilmenite and rutile, remain under pressure while the
wider industry is in a state of flux.
Reg Adams, managing director of
UK-based minerals and pigments intelligence provider, Artikol,
said that TiO2 prices are unlikely to trend upwards
before the end of 2015, after which they may see a slight
Separately, Laurence Wang, business
manager at Tinox Chemical LLC said that titanium feedstock
shortages in China a few years ago led to rapid expansions in
production capacity, which caused prices to fall.
prices for TiO2 pigment (high quality, bulk volume)
currently stand at $2,600-3,100/tonne on a CFR Asia basis.
Wang added that the decline in
Chinese ilmenite prices has been even steeper than that seen
Ilmenite (bulk concentrates, min
54% TiO2) prices are reported to be around
$140-150/tonne on a CIF China basis.
Rutile prices, on the other hand,
face a more certain future, according to Wang. In contrast to
predictions for rutile prices outside China, these are expected
to begin to see improvements by the second quarter of 2015, he
Rutile (concentrate, min 95%
TiO2, bulk) prices are assessed as being
$820-950/tonne, CIF China.
TiO2 pigment consumption
tracks GDP and is suffering from the slowdown in China,
according to Wang.
Lower consumption has meant
TiO2 and feedstocks markets are leaning towards
significant oversupply, although Adams said that while
restructuring is underway at many of the world’s
major TiO2 producers, further major changes on the
supply side are unlikely in the near future.
Following the price spikes in
TiO2 in 2011-2012, major pigment producers started
thrifting with the pigment, replacing it with cheaper
alternatives. This trend has continued, even though prices have
since fallen back, as TiO2 consumers are cautious
about future price volatility.
However, Adams argued that
substitution is unlikely to have any significant effect on the
industry in the long, run as "interest in this area dies away
as soon as prices revert to normal, which is something we are
Oilfield minerals - ore out
Buyers of Indian drilling grade
barite reported that some grades of the oilfield mineral were
unavailable from India in October, as the market continued to
await the conclusion of domestic tenders to mine and market
At the time IM
went to press, the tenders had still not been issued, and
sources in India said that there was still "a lot of political
wrangling" that needed to take place before contracts could be
According to US importers, drilling
grade barite was unavailable for both specific gravity (SG)
4.20 and SG 4.10 grades (underground lump, OCMA/API) on an FOB
Chennai basis in the first two weeks of October. These were
trading at $138-145/tonne and $110-125/tonne, respectively, at
the time of going to press.
Meanwhile, prices for Chinese SG
4.20 drilling grade barite (API, underground lump, FOB China)
have narrowed downwards to $115-125/tonne from $115-130/tonne,
sources said, and SG 4.10 material (FOB China) is priced at
Elsewhere, prices for Turkish
drilling grade barite have risen by an average of 8% from
levels seen two years ago, market participants have indicated
Pricing data received from European
sources suggest that prices for Turkish barite (ground,
OCMA/API, big bags [1.5 tonnes], FOB Southern Turkey) are now
in the range of $164-168/tonne, up from $150-155/tonne in
US-based market participants told
IM that, as peak summer demand for drilling
barite in North America is now passed, the squeeze on supply
caused by the Indian tender situation has not left the market
short enough to send prices up.
Separately, the Indian
government’s decision to increase royalty rates
for all domestically produced major minerals is set to make
India one of the most expensive raw material suppliers in the
world, industry observers have warned.
Taxes will be raised on 51
minerals, including barite for which the royalty now stands at
6.5%, with the exception of coal, lignite and silica sand for
stowing (packaging and shipping), under the provisions of Mines
and Minerals (Development and Regulation) (MMDR) Act 1957.
For Turkish material, one domestic
producer said that incremental increases in production costs
were partly responsible for the rises seen in this market, but
that prices have been helped by robust demand for barite in
European and North African oilfields.
This view was supported by traders,
who said that oilfield mineral consumption in Europe, in
particular, had picked up over the course of 2013 and remained
healthy during the first half of 2014.
Refractory minerals - China
magnesia price rises
Prices for Chinese refractory grade
magnesia products are increasing, market participants informed
IM in late September.
One US-based source who has direct
dealings with Chinese suppliers, said that "prices are going
up; luckily, we got all of our barges filled ahead of the
increases, which saved us a lot of money".
Sources in China said that prices
were going up because the cost of a licence to export magnesia
under the Chinese quota system has recently increased to
Chinese renminbi (Rmb) 800/tonne ($130/tonne*).
Additional resource (Rmb 15/tonne
[$2.44/tonne]) and water (Rmb 1.3/tonne [$0.21/tonne]) taxes
levied on magnesite mining are also pushing up costs.
prices for deadburned magnesia (DBM) 90% MgO (lump, FOB China)
have been revised to $270-290/tonne, up from $255-270/tonne.
Prices for DBM 92% MgO (lump, FOB China) have been adjusted to
$300-380/tonne from $320-400/tonne.
For fused magnesia (FM), global
expansion in production capacity could cause prices to plummet
in the near future, market participants have warned.
Speaking to IM at
the 57th International Colloquium on Refractories in
Aachen, Germany, in September, traders and producers alike
expressed concern over the rising production levels,
particularly in Asia where many have a cost advantage over
Western companies, creating an excess of material in the
Chinese FM prices currently stand at $980-1,050/tonne (98% MgO,
lump, FOB China); $850-950/tonne (97% MgO, lump, FOB China);
and $600-630/tonne (96% MgO, lump, FOB China).
Some non-Chinese sources said that
there appears to be confusion in the market, with one US buyer
saying they thought that the licence fee for magnesia had been
cancelled, leading to a purchasing rush.
Major Chinese magnesia producers
Haicheng City Rongli Magnesia Co. and the Liaoning Provincial
Non-Metallic Mineral Association have both said that the quota
and licence system has not, and will not, be cancelled,
There have been a number of rumours
in recent years that the export licence system will be removed
as China consistently fails to fill up its quota, but the
country relies on the mechanism to help it eliminate outdated
production capacity and control production.
China exported around 23% more
magnesia in H1 2014 compared to 2013, although volumes shipped
still fell short of permitted limits.
China’s Ministry of
Commerce (MOFCOM) website contains a current list of
company’s awarded licences to export DBM, FM,
magnesia composites and brucite in 2014, suggesting that the
system is still in place.
The Liaoning Mineral Association
said that prices are steady at present but are expected to
increase in the coming weeks, as September and October are
traditionally busy months for magnesia purchasing, both
domestically and internationally.
*Conversions made October
Full information on all
IM’s prices can be found on the
IM Prices Database online at www.indmin.com/pricesdatabase.
For fluorspar and graphite
prices, please visit the IM Data mineral
tracker pages at www.indmin.com/fluorspar