Waning demand from major industrial
mineral-consuming segments such as paints, plastics and
refractories is filtering back to raw materials suppliers with
Fluorochemicals, pigments and carbon materials used in steel
production have been among the hardest hit, with participants
in these industries telling IM that even
with inventories running down, the anticipated subsequent
pickup in demand has so far been slow to materialise.
Overcapacity remains a major concern for upstream mineral
producers. Rather than shutting down production altogether,
many facilities have simply been idled, ready to restart when
consumption levels increase.
However, many are now facing the prospect of
permanent closure, particularly in the titanium dioxide
(TiO2), fluorspar and antimony sectors. Although
this is glumly accepted as a healthy necessity for many
industries, the situation has created a stalemate as
businesses hope that their competitors will be the first to
fold up capacity for good.
In the graphite industry, non-Chinese
producers, worried about the sliding prices, may take some
comfort from the pressure being exerted on
China’s domestic industry, which is facing
increasingly strict pollution controls and government demands
to make higher value material, leaving some plants unviable
Currency fluctuations have also had a
significant impact on mineral businesses in recent months,
skewing some quarterly earnings results for better or worse,
while oil prices are benefitting some producers’
costs at the expense of profits in the oilfield minerals
The Belarusian Potash Co. (BPC) has signed a
$1.3bn memorandum of understanding (MoU) to supply
potash to China over a five year period.
Inked in the first half of May, the contract
between BPC and China’s Sinochem Fertilizer
Macao Commercial Offshore Ltd (Sinofert) will see 4m tonnes
Belarussian potash delivered between May 2015 and 2019.
BPC said that the contract included both firm
and optional volumes of potash, while the exact price in the
contract is subject to further discussion.
The agreement followed an earlier deal signed
between North American fertiliser marketing company Canpotex
Ltd and Indian customers, finalising annual potash supply
contracts totalling 1.3m tonnes at higher year-on-year
Per tonne pricing was $10/tonne higher than in
2014, bringing the new contract price to $332/tonne, which
will remain in place until the end of March 2016.
The meteorological phenomenon El Nino is set to
return this year, it was confirmed in mid-May, with
experts warning that the extreme weather events associated
with the Pacific warming phase could push up some commodity
The Australian Bureau of Meteorology reported
that a "moderate to strong" El Nino is emerging, five years
after the last in 2009-10, which saw droughts and floods in
different regions damage crop production and sent the price
of agricultural commodities soaring.
According to a report by the Financial
Times (FT), wheat, rice, sugar, coffee and
cocoa are all vulnerable to the impacts of El Nino, as well
as rubber, palm oil, dairy products and anchovies.
The news could provide a boost for fertiliser
mineral suppliers if farmers need to bump up production to
compensate for lost crops this year.
Chemical minerals continue to
The closure of antimony smelters in
Lengshuijiang, China, buoyed the antimony ingot market and
maintained prices at slightly stronger levels in the first
half of May, according to local sources.
Lengshuijiang is the main producer of exported
antimony in China, shipping around 3,000 tpm, or 80% of
Chinese overseas ingot sales, most of which is exported
The government of Lengshuijiang instructed the
smelters to stop production from 1 April to tackle pollution
in the area, with the intention of allowing the group to
reform as a company with managed output.
IM’s prices for
trioxide grade antimony ingot (99.65% min
Sb2O3) stand at $7,750-7,850/tonne on
an FOB China basis and CIF Rotterdam basis.
Prices for antimony trioxide (typically 99.5%
Sb2O3) stand at $6,900-7,050/tonne CIF
Antwerp Rotterdam (5-tonne lots) and at $6,900-7,000/tonne
FOB China (20-tonne lots).
One of Asia’s largest producers of
bromine chemicals, Gulf Resources Inc., said in April that
the increase in list prices put forward in recent months by
US producer Albemarle Corp. and Israel Chemicals Ltd (ICL)
for Asian markets is likely to boost bromine prices in
"The significant price increases by the two
largest companies in the bromine industry will have a
positive effect on the Chinese domestic bromine market,"
Xiaobin Liu, CEO of New York-listed Gulf, commented.
"It is difficult to predict when these price
increases will be fully reflected in China. However, we
believe when customers work through their current
inventories, we will see significant increases in
IM’s prices for
bromine (purified, bulk, 99.95% Br, domestic destination,
tonne lot, ex-works US) stand at $1.6-1.75/lb
Acid-grade fluorspar (acidspar) prices fell by
an average of 33% in Q1 2015 from the peaks of 2011, leaving
some prices at their lowest levels in the last two-and-a-half
The price of acidspar, 97% CaF2, dry
filtercake, FOB Durban, started last year at around
$415/tonne, however, further declines in February, May and
October have now left prices rooted at $315/tonne.
In China’s antimony industry,
since production was halted in Lengshuijiang, the price of
antimony ingot has risen slightly and is now steady at higher
levels, clo-se to the top of
IM’s published ranges.
The government has yet to announce a date for
the reopening of the smelters, but some market commentators
believe the plants could be closed for six months.
Demand for antimony ingot and antimony trioxide
remains weak, meanwhile, with no significant upturn predicted
in the near future.
For bromine, Liu’s comments hint
at resistance to higher prices by Asian customers, as
recently remarked by both Albemarle and local US rival,
Chemtura Corp. As well as price rises for elemental bromine,
companies have sought to introduce higher priced flame
retardant chemicals into Asian markets as they manufacture
new regulation-compliant brominated products for consumer and
While there remains a plentiful supply of
bromine, buyers in lower-cost regions like Asia are reluctant
to pay more for the products.
Liu said that efforts by the Chinese government
to boost the country’s economy could increase
demand for bromine, which is linked to construction and
consumer markets through its use in insulation foams,
textiles and plastics.
With respect to fluorspar, the ongoing downturn
in fluorochemical demand, owing to changing legislation and
overcapacity in China, has had a considerable impact on
acidspar markets owing to the material’s
application as a feedstock in hydrofluoric (HF) acid
production. This slump has caused Chinese and European prices
to fall by as much as 46% since 2012.
Prices fell continuously throughout H2 2014
following on from a disappointing first-half of
Mineral sands: pigment price push
Efforts by suppliers of TiO2 to
raise list prices for the pigment are not trickling down to
producers of mineral sands feedstocks.
Market reports at the end of April suggested
that Asian exports of TiO2 were available for
$1,900-2,000/tonne FOB China and could rise by $50/tonne for
deliveries in May.
Reports suggested that non-Chinese producers
were offering heavily discounted cargoes of chloride route
TiO2 to buyers in Asia-Pacific in an attempt to
recapture market share from Chinese producers.
Prices were rumoured to be $2,300-2,600/tonne
CFR Asia for Q2, which is around $50-100/tonne lower than
prices paid in Q1 this year.
Ilmenite, rutile and leucoxene prices remain
weak, however. IM’s prices for
ilmenite (bulk concentrates, min 54% TiO2, CIF
China) stand at $100-120/tonne.
Rutile prices (concentrate, min 95%
TiO2, bulk, CIF China) currently stand at
$810-850/tonne, according to the IM Prices
Leucoxene prices (min 91% TiO2, max
1% ZrO2, bagged, FOB West Australia) stand at
Zircon prices remained steady in May, with
traders reporting scant business in the market.
IM’s prices for
premium grade zircon (66.5% min ZrO2, bulk) stand
at $1,050-1,150/tonne FOB Australia; $1,050-1,450/tonne FOB
US; and $1,050-1,150/tonne CIF China.
Standard grade zircon prices (min 65.5%
ZrO2, bulk) are $1,000-1,050/tonne FOB Australia;
$960-1,150/tonne FOB US; and $1,080-1,100/tonne CIF
In the TiO2 market, it was suggested
that European and North American pigment suppliers are
undercutting these price levels, however IM
sources said the producers in these regions remain concerned
about the arrival of competitively priced Asian
TiO2 on the global market (see p12).
Market participants added that Europe and
US-based pigment companies have indicated that
they do not expect significant
demand recovery this year and that they are not anticipating
having to pay more for ilmenite, rutile and leucoxene
feedstocks as a result.
At the end of April, Anglo-Australian miner Rio
Tinto said it had cut its TiO2 output by 17% to
322,000 tonnes in the first quarter of this year in response
to weak market conditions, while US TiO2 producer
Huntsman Corp. confirmed that global prices for the pigment
remain low and that demand is still under pressure.
The company reported a 90% y-o-y fall in income
to $5m in the first quarter of 2015 as business conditions
Average selling prices decreased owing to the
impact of a stronger US dollar against major European
currencies coupled with high titanium inventory levels,
IM sources said that demand
for pigments is flat at present and that TiO2
manufacturers are putting pressure on ilmenite and rutile
feedstock suppliers in an effort to preserve their own
For zircon, some market participants said that
there could be a shortage of zircon in the market within the
next five years, assuming demand remains steady.
Others dismissed this idea, however, saying
that although prices are expected to remain stable for the
foreseeable future, with the substitution trend having
levelled out, scarcity is unlikely to be a factor in the
Refractory minerals – rough
with the smooth
High purity (94-97% C) flake gra-phite prices
have fallen by over $200/tonne since January 2015, while low
purity (85-87% C) flake graphite prices dropped by nearly 20%
in Q1 2015 as the threat of excess supply and poor demand
were compounded by currency fluctuations.
The average price of European flake graphite
grades, which had already fallen by almost 13.5% since the
start of the year, fell by a further 12% in April, dragging
prices yet closer to those of Chinese grades, which were down
The prices of larger mesh grades have also
fallen. The price of +80 mesh flake (94-97% C, FCL, CIF
Europe) dropped to between $1,050-1,150/tonne from
$1,250/tonne at the beginning of January 2015.
Prices for refractory-grade olivine have
remained within IM’s cur-rent
ranges, even though its main end market, refractories, is
under pressure from falling consumption.
Industry sources in Europe confirmed to
IM that refractory-grade olivine (bulk) is
currently priced at €80-130/tonne ($89-145/tonne*).
Prices for olivine in the US (refractory grade,
bulk, US, ex-plant/mine) are within the $80-150/range.
The decreases across the flake graphite market
follow a brief period of stability as activity slowed
throughout Q4 2014.
An upturn in production seen following the
Chinese New Year, accompanied by low demand and the fall in
the value of the euro against the US dollar has, however,
pushed global prices down further as producers prepare for a
minor recovery in sales over the coming months.
IM sources indicated that
sellers offering material priced in euros had to bear the
brunt of the fall in the currency devaluation, which severely
impacted their profit margins.
There are a few signs of recovery in demand
from the refractory sector, owing to a slight rebound in the
US steel market, suggesting an upturn is on the horizon.
However, some IM sources have suggested that
this is unlikely to feed through to the graphite industry
before late Q4 2015.
Excess supply pressures have been a greater
burden across finer mesh grades, which in certain cases have
fallen to as low as $500/tonne for flake (90% C, -100 mesh,
For olivine, the largest end market is in slag
conditioners and stabilisers within blast and electric arc
furnaces (EAFs) in the steel industry.
According to recent reports, EAF activity is
currently weak owing to slowing global steel production.
US-based carbon materials producer GrafTech International,
which makes synthetic graphite electrodes for the steel
try, blamed its $55.6m first quarter loss on soft demand
However, Brazil-based Magnesita Refratarios
recently cited demand for steel recycling, which also employs
EAFs, as an area
of demand growth in the near future.
Other uses for olivine include foundry sands
and abrasives, where demand is broadly reported to be flat at
Producers of the mineral told
IM that they did not foresee any sudden
changes in demand this year.
*Conversions made May 2015
Full information on all
IM’s prices can be
found on the IM Prices
Database online at