Currency fluctuations played havoc with mineral
prices in March. City of London analysts have predicted that
the euro could slip to a one-to-one exchange rate with the US
dollar, following the commencement of the European Central
Bank’s (ECB) quantitative easing programme.
The euro was valued at €1.05 against the
dollar in mid-March – the first time it had ducked
under the €1.06/$1 mark since April 2003. This has made
European mineral exports more attractive to purchasers buying
in dollar denominated contracts but is eating into the export
margins of some producers, although others have welcomed the
lower costs and increased shipments prompted by the exchange
The fluctuation in European currencies, together
with the slumping price of oil and iron ore, is creating
uncertainty in the markets, with fears mounting that
commodities have entered a period of unstoppable decline.
At the Global Mining Finance Spring Conference
held in London in March, Jeremy Wrathall, head of global
natural resources at specialist commodities bank Investec,
blamed a failure to appreciate the reality of
China’s economic situation as part of the reason
for the turmoil.
"It is important to realise [that lower commodity
prices] are not just to do with oversupply, they are a factor
of demand as well," he said.
He pointed out that currency depreciation in many
large mining countries, including Australia and South Africa,
had thrown a lifeline to mineral producers and kept capacity
online which realistically ought to drop out of the market.
Wrathall said that, in his opinion, the view that
China would reach "peak steel" by 2020 was over-optimistic. "It
is my belief that China has already reached peak steel;
capacity is starting to come offline," he said.
In industrial mineral markets, currency
depreciation affected phosphate, titanium dioxide
(TiO2) and graphite, with industry sources reporting
pressure to raise list prices in order to compensate for lower
returns on contracts.
In the refractory minerals segment, industry
participants are widely expecting to see lower prices for
bauxite, alumina, magnesia and graphite in the coming months in
response to flagging demand from the steel industry, but there
has so far been little concrete evidence of suppliers
officially reducing offers.
Some positivity has been seen in the soda ash
market, meanwhile, where prices are expected to be strong this
year, while zircon producers have taken some comfort from
predictions of flat pricing for the foreseeable future.
Agriminerals – currency crunches
European phosphate supplier Prayon Group said in
mid-March that it would raise the price of its phosphate
products worldwide in an effort to stem losses flowing from the
falling value of the euro.
The Belgium-based company, which is jointly owned
by Morocco’s Office Cherifien des Phosphates (OCP)
and the Wallonia Regional Investment Co. (SRIW), said that the
increases would be around €100/tonne ($105/tonne*)
P2O5 and would take effect from 1
North American potash cartel Canpotex Ltd was
reported to be angling for an 8% increase in the price of its
potash supply contract with China’s Sinofert
Holdings Ltd at the end of February.
The increase, which equates to around $25/tonne
potash, was mooted by Jim Prokopanko, CEO of US-based
agrimineral producer The Mosaic Co. and reported by
Prokopanko said that Sinofert is looking to pay
the same $305/tonne rate they agreed with Canpotex last year
– a heavily discounted price agreed in January 2014 in
the wake of the potash market collapse, caused by the breakup
of the Belarusian Potash Co. (BPC) in August 2013.
Potash prices currently stand at $320-410/tonne
muriate of potash (standard, bulk) FOB Vancouver —
where Canpotex owns a number of nearby West Coast export
facilities and port land — according to the IM
Phosphate prices had seen some recovery last year
after falling steeply in the final quarter of 2013 following
ructions in the global fertiliser market, led by the breakup of
the BPC in August 2013.
However, the rampant US dollar and the sliding
value of the euro have left companies selling the fertiliser
minerals in euros at a disadvantage in international markets,
with the currency’s devaluation eroding
Potash similarly saw a price revival in 2015, but
large buyers are keen to take advantage of the present fragile
state of the market to negotiate cheap deals.
"China’s holding firm," Mosaic’s
Prokopanko told delegates at a Bank of America Merrill Lynch
investor confidence in Fort Lauderdale, Florida.
Canpotex is jointly held by Mosaic and
Canada-based potash producers, PotashCorp. of Saskatchewan and
Agrium Inc. Prokopanko said that, as a shareholder in Canpotex,
his advice to the marketing body was to stand its ground over
its price offer.
Prokopanko said that Canpotex’s
potash is already moving smoothly to other buyers and expects
Sinofert to agree contracts with its rivals before it seals an
agreement with the North American firm. He anticipated that
Canpotex would sign a deal around the end of March or early
Chemical minerals – soda ash
Prices for antimony trioxide in China fell below
the $7,000/tonne mark in mid-March, sources told
The price of antimony trioxide (typically 99.5%
Sb2O3, 20-tonne lots) has fell to
$6,950-7,050/tonne on an FOB China basis, down from
$7,100-7,300/tonne at the beginning of March.
CIF Antwerp/Rotterdam prices have also fallen and
stand at $7,000-7,100/tonne, compared with $7,200-7,500/tonne,
Prices for trioxide grade antimony ingot (99.65%
min Sb2O3) remain unchanged, meanwhile,
at $7,800-8,200/tonne, FOB China, and $7,900-8,300/tonne CIF
Standard grade antimony ingot prices currently
stand at $8,100-8,400/tonne, according to Metal
Bromine prices are not expected to recover from
their present depressed levels in 2015, according to outlooks
from some of the industry’s major suppliers.
IM’s prices for
bromine (purified, bulk, 99.95% Br, domestic, tonne lot)
currently stand at $1.55-1.70/lb ($3.41-3.74/kg).
Prices for natural and synthetic soda ash rose in
all major markets across the world last year and are set to
remain robust in 2015.
According to one source, buyers of soda ash for
glass – the mineral’s largest end market
– have paid around 5-10% more for material over the
last year, on average. Smaller chemicals companies have
reportedly faced increases of up to 20% in the price of soda
ash, but overall the increase has been around 10% on a weighted
average basis, according to industry analysts.
One North American glass market participant said
volume industry buyers were expecting to pay around $5-7/tonne
more for soda ash in North America this year, although smaller
buyers could be looking at hikes of up to $20/tonne.
IM’s prices for
synthetic soda ash (dense and light, small parcels, delivered
Europe) currently stand at €215-235/tonne
Indian material (synthetic, imported, dense) is
priced at $240-290/tonne, while ex-works India prices (dense
and light, domestic) stand at $290-310/tonne.
In the US, prices for natural soda ash
(delivered, Wyoming,) stand at $200-230/tonne.
FOB China prices for synthetic material (dense
and light) are $190-205/tonne.
In the beleaguered antimony market, antimony
prices were boosted in the second half of February when supply
tightened as a result of the Chinese Spring Festival holiday.
Ingot values have remained higher than they were at the start
of the year, although prices are still running close to or even
below production costs for many producers.
One source told IM that the
smuggling of antimony ingot from China into Vietnam ceased
during the Spring Festival, which helped support the market,
but that the supply of antimony trioxide has remained unchanged
and prices are struggling in the wake of low demand.
Meanwhile, Chinese bromine and salt producer Gulf
Resources Inc. in March reported a 17% overall decline in net
income in 2014 to $17.9m, down from earnings of $21m the
previous year, blaming weakness in bromine and salt prices.
"Overall, we expect that the Chinese economy and
bromine demand will remain relatively soft [in 2015]," Gulf
said in its earnings release.
In February, US-based speciality chemical makers
Albemarle Corp. and Chemtura Corp. both reported bromine
pricing pressure, thanks to the further decline in flame
retardant demand for flexible foam applications and
Craig Rogerson, Chemtura’s CEO,
described the company’s margins on bromine as
"lousy", but said that the company expected to maintain these.
He added that the strikes at Israel Chemicals
Ltd’s (ICL) bromine facilities in Israel could
support prices to some extent if they last long enough to take
capacity out of the market, but noted that the likely short
duration of the strikes would prevent this.
"We are not relying upon a recovery in bromine
this year but will clearly exploit any recovery if it does
occur," Rogerson said.
For soda ash, Turkey was a hot spot for demand
last year, with strong consumption in its container and flat
Soda ash for detergents also saw growth in Asia,
although this market has been slowing in Europe and North
According to one source, South East Asian soda
ash producers have not increased their prices, meaning that the
American National Soda Ash Corp. (ANSAC), which is a major
exporter to the region, has not been able to introduce higher
prices here as it has in other areas.
The surge in popularity of domestically brewed
craft beers in the US is also expected to support the price of
the glass mineral this year.
US craft beer consumption has witnessed rapid
growth in the last decade and craft breweries more than tripled
their market share, from 2.5% by volume in 2003 to 7.8% in
2013, the most recent year for which data is available from the
Boulder, Colorado-based Brewers Association.
Although overall beer consumption in the country
is down by around 2%, the shift in drinkers’
preferences to craft beverages served in glass bottles rather
than mass produced canned beers is helping soda ash demand.
According to the source, the conversion from
glass containers to plastic and cans for packaging, which
dented soda ash consumption in the last two decades, has now
largely bottomed out.
Mineral sands’ decline
Prices for TiO2 in Asia were expected
to be pushed up by recent increases in selling values for the
pigment in Europe, sources told IM at the
beginning of March.
TiO2 producers have reported some
running down of inventories and said that the dip in production
over the Chinese New Year period in mid-February should buffer
the price of material originating from China by up to
Ukraine-based Crimea Titan
recently raised the price of its TiO2 pigment by
Ukrainian hryvnia (Hrn) 14,500-16,000/tonne ($617-681/tonne),
citing the devaluation of the hyrvnia against the dollar as the
reason for the increase.
IM’s prices for
TiO2 pigment (high quality, bulk) stand at
$2,500-2,900/tonne on a CFR Asia basis and
€2,200-2,500/tonne ($2,389-2,715/tonne) on a CIF Northern
Europe basis, but FOB China prices are reported to be in the
Prices for zircon are expected to remain stable
for the foreseeable future, market sources have told
Sources in Australia and Asia both reported flat
pricing at the end of February, thanks to stability in the
IM’s prices for
premium grade zircon (66.5% ZrO2, bulk) stand at
$1,050-1,150/tonne on an FOB Australia basis;
$1,050-1,450/tonne FOB US; and at $1,050-1,150/tonne FOB
Prices for standard grade zircon (65.5%
ZrO2, bulk) stand at $1,000-1,050/tonne on an FOB
Australia basis; $950-1,150/tonne FOB US; and
$1,080-1,100/tonne FOB China.
The positive effect of the shift in supply on
TiO2 prices has been curtailed by competitive offers
from Chinese pigment suppliers.
Some of China’s largest producers
have recently pointed to the low price of ilmenite as boosting
their margins in the last year. Many of China’s
TiO2 manufacturers have increased production to take
advantage of the price differential and have begun exporting
more material to overseas customers, injecting a new
competitive impetus into the global pigments market.
Mineral sands producers have said they expect to
see some improvement in feedstock prices within the next year,
assuming that miners exercise discipline over output volumes
while the supply-demand balance remains fragile.
Analysts have told IM that they
do not expect ilmenite and rutile prices to recover before
For zircon, participants active in Australian and
Asian mineral sands markets said that prices remain within
IM’s current ranges and are
unlikely to move in the near term.
"It seems zircon will remain flat for a while
yet," one Australia-based source said. "No doubt the cycle will
swing upwards again, but there is no sign of significant price
[movements] as yet," the source added.
Refractory minerals - magnesia firm for
Prices for fused magnesia have remained stable so
far this year, despite expectations of a drop in the market
based on downstream weakness in the steel refractories
Prices for higher grade fused magnesias have been
particularly resilient, market sources said.
IM’s prices for fused magnesia
(98% MgO, lump) stand at $980-1,050/tonne on an FOB China
Industry sources said that while there have been
no official price discounts for magnesia so far this year,
producers are preparing for lower prices later in the year as
demand conditions force the market down.
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 and www.indmin.com/graphite.
*Conversions made March 2015