Specialist mining bank Investec commented in early July that
mining is "going nowhere and nowhere fast", pointing to
continuing volatility in commodity prices and unpredictable
foreign exchange rates, against a background of macroeconomic
challenges, that it said were keeping the sector down.
Investec highlighted weaker than expected US
growth and the increasing likelihood of a Grexit from the
Single European Currency (euro), plus the fact that economic
stimulus measures in China have failed to boost commodity
While headline commodities, including iron ore,
coal and oil, are regarded as being among the most vulnerable
to macro trends, niche markets are also feeling the
The summer months are traditionally slower for
business in a number of sectors, but with weak trading already
characterising much of the industrial minerals industry, even
the slight winding down in commercial activity that became
evident towards the end of June was having a disproportionate
impact on mineral prices.
There was some positivity for both chemical and
drilling grade barite (barytes), bromine and soda ash, but the
situation continues to look bleak for refractory minerals,
including magnesia and graphite. Fluorspar, titanium pigment
minerals and rare earths are also continuing to buckle under
overcapacity and poor demand.
Tel Aviv, Israel-based Israel Chemicals Ltd (ICL)
inked a contract with customers in India at the end of June to
supply 835,000 tonnes potash, including options.
Spot prices for potash (standard grade) are
reported to be around $300-310/tonne.
Echoing other recent deals in the potash
industry, ICL will see the distributors pay $10/tonne more for
the potash than the equivalent contracts stipulated last
"[The Indian potash market] is expected to be a
leading driver of worldwide potash demand for years to come,"
the CEO of ICL subsidiary ICL Fertilizers, Nissim Adar,
Chemical minerals: Up and down
Prices for paint grade barite have managed to
skip the negative pressure affecting drilling grade material to
shift upwards slightly in recent weeks.
Prices for chemical grade barite (Chinese, CIF
Gulf Coast) have narrowed upwards to $170-180/tonne, from
Meanwhile, prices at the lower end of the range
for white, ground paint grade barite (96-98% BaSO4,
325-350 mesh, 1-5 lots, ex-works US), have moved up to
$325-400/s.ton from $315-400/s.ton.
The price of bromine has fluctuated by as much as
10% since the beginning of this year, forcing downstream
producers of brominated products to introduce their own price
Domestic Chinese prices for bromine rose as high
as Chinese renminbi (Rmb) 19,670/tonne ($3,172/tonne*) in May,
up from Rmb 17,775/tonne ($2,868/tonne) at the end of January,
but have since settled back to around Rmb 18,741/tonne
Sources said that selling values for elemental
bromine were still in line with
IM’s published ranges. These
stand at $1.6-1.75/lb ($3.52-3.85/kg) for 99.95% Br material
(bulk) on an ex-works US basis and $1.6-1.8/lb ($3.52-3.96/kg)
Acid grade fluorspar (acidspar) prices are likely
to remain weak for most of 2015, as new capacity pushes up
production levels in an already sluggish market –
intensifying competition in the sector as producers try to sell
mounting stockpiles at narrowing margins.
Chinese prices have fluctuated around the
$280/tonne mark for a number of weeks, with average FOB prices
for 97% CaF2 material remaining above $300/tonne
Today, the price for acidspar, 97%
CaF2, dry filtercake, from China to India is at
$290/tonne, although sources told IM that
shipments at the rate of $275/tonne on CFR India basis have
been offered by other suppliers in the region.
Vertically integrated chemicals producer Tronox
Ltd is to increase its list and off-list soda ash prices by
$12/s.ton from 1 September, covering both bulk and packaged
Tronox gave its new list prices for bulk soda ash
(FOB Westvaco or Granger, Wyoming) as $302/s.ton for dense
material; $322/s.ton for its trademarked Grade 100 product; and
$332/s.ton for its Absorpta Plus line of soda ash.
Prices for packaged soda ash (FOB Westvaco,
Wyoming) now stand at $367/s.ton for 50lb and $357/s.ton for
2,000lb of dense material and at $387/s.ton for 50lb and
$377/s.ton for 2,000lb of Grade 100 product.
The company said that Tronox
Alkali’s energy surcharge and freight policies for
soda ash will remain in effect, with the surcharge base cost
set at $7/million British Thermal Units (MMBtu).
Chemical barite industry sources in North America
told IM that the market has remained strong so
far this year. "No price concessions have been made," one
A barite supplier that ships chemical grade
barite from China to the US said that buyers are pressing for
price reductions but that sellers are standing firm in order to
preserve margins for non-oilfield products as drilling grades
come under threat.
Sources said that the value of this material had
been driven up by higher prices for Chinese shipments of the
same grade. "White barite prices have seen a net increase based
on an average of all shipments FOB China," one market
participant told IM.
In bromine, back in April this year, leading
Chinese bromine producer Gulf Resources mooted the possibility
of a rising price trend for the chemical in China, pointing to
recent increases by rivals US-based Albemarle Corp. and
Prices for bromine have been under pressure for
the last two years, particularly in Asia, as demand from its
main-consuming market, the flame retardants industry, has
slackened in line with weaker manufacturing activity.
At the beginning of July, US-headquartered AOC
Resins, which manufactures flame retardant compounds, announced
it was increasing the price of all brominated fire retardant
resins by $0.06-0.11/lb ($0.13-0.24/kg).
"The action is due to recent sharp increases in
bromine and brominated raw materials [prices]," AOC said.
Market sources told IM that the
bromine market was "improving", although gains were limited to
recouping some of the pricing ground lost over the last
Meanwhile, in fluorspar, the softening prices for
Chinese acidspar material have been triggered by an increasing
amount of product on the market from emerging suppliers in
Southeast Asia, pitching acidspar at comparatively lower prices
and jeopardising the market share of existing producers.
This comes on top of bearish fluorochemicals
demand, with the majority of fluorocarbons registering an
average drop of 4-7% year-on-year (y-o-y) compared to 2013
While some industry sources have suggested that
prices have slightly improved above current ranges, the extent
of these increases remains unclear.
If demand fails to pick up in the current
oversupply situation, any upturn in prices is unlikely entering
For soda ash, Tronox did not give any reason for
the increase in its prices, but it is likely that the company
is taking advantage of strong demand for the glass and
Industry sources have reported that the sector
was robust in H1 2015, with consumption expected to stay on a
mildly positive trend throughout the rest of this year.
Contract prices for soda ash in the US are
typically decided on a 12 month calendar basis, meaning that
Tronox’s revised list prices are likely to remain
in force until the end of Q2 2016, notwithstanding any sudden
changes in market conditions.
China’s Ganzhou Rare Earth
Association cut its guide prices for ion-absorption (heavy)
rare earths concentrate for the first half of July, citing the
impact of higher resource taxes on medium and heavy rare
The reduction in guide prices follows three
consecutive increases throughout May and June and has taken the
wind out of the sails of many industry observers who had
suggested that demand for heavy elements, including europium
and dysprosium, was bucking the downward trend in light rare
IM’s prices for
rare earths (all of which are min 99% grade on a bulk, FOB
China basis) stand at: $2.1-2.5/kg for cerium oxide;
$240-255/kg for dysprosium oxide; $220-250/kg for europium
oxide; $2.1-2.5/kg for lanthanum oxide; $43-48/kg for neodymium
oxide; $43-49/kg for praseodymium oxide; and $2.5-3.5/kg for
According to feedback from sources, which was
backed up by reports by Chinese media outlets, prices for
neodymium metal reached a five-year low at the beginning of
July, with values reported to be $55-62/kg for min 99% material
on an FOB China basis.
Sources blamed weak demand from the
neodymium-iron-boron (NdFeB) magnet industry for the market
trough and said that government rhetoric about rapid growth of
the NdFeB sector is overstated. "The market is expanding, but
not enough to take all of the backlog of neodymium as
well as new supply," one China-based source told
IM. NdFeB is a high strength permanent magnet
material used in technologies such as wind turbine
In other parts of the rare earths market,
importers of Chinese rare earths are reported to be drawing on
existing inventories of material rather than buying in new
supply and there is little incentive to build up new stockpiles
as many believe that prices will go down further.
Price declines in China have not wholly fed
through into export markets, however, with prices in Rotterdam
warehouses showing a softer decline than Chinese export prices
over the last month.
Mineral sands mired in gloom
Titanium dioxide (TiO2) prices in
China are likely to stagnate or even decline during the third
quarter of this year, due to weak domestic demand, according to
the latest industry forecast by China Chemicals Market
TiO2 prices have been rising in China
in recent months, with rutile TiO2 prices rising
4.8% between March and the end of May and anatase
TiO2 prices increasing 6% over the same period.
However, according to CCM, these price
rises may be unsustainable. An underlying lack of demand for
TiO2 in China’s domestic market will
drag prices back down during the second half of the year.
IM’s prices for
TiO2 pigment (high quality, bulk), stand at
$2,400-2,800/tonne CFR Asia.
CCM pointed out that the recent recovery
in TiO2 prices in China has been driven by two
factors – a slowdown in production during late-2014
and early-2015 and opportunistic price rises by some
"Several small-scale TiO2 producers in
Guizhou and Sichuan suspended production when prices were at
their lowest, which gave producers a bit more control over
prices. And several producers took the opportunity to raise
prices after the end of the Spring Festival holidays and the
announcement of the Henan Billions-Lomon merger," CCM
"However, there has been no noticeable increase
in demand this year and several distributors (…) have
admitted being unable to raise their TiO2 prices any
further when negotiating with downstream companies. This
indicates that China is still very much a buyer’s
market, and further price rises are unlikely."
CCM’s said that its
research of downstream markets suggests that the demand
situation is unlikely to improve in the short term.
A slowdown in China’s real estate
market, where the total area of new housing projects under
construction was down 17% y-o-y during the period from January
to April 2015, is having a negative effect on the coatings
market, which is by far the largest downstream market for
Chinese coatings output was down 5% y-o-y in
April and this is exacerbating already severe overcapacity
problems in the industry. As a result, many coatings producers
are struggling to turn a profit and are likely to put
TiO2 suppliers under pressure to reduce prices.
Things are not looking much better in the
plastics market, which is the second largest consumer of
TiO2 in China. Though the plastics industry was
recovering strongly thanks to rising global oil prices between
January and April, this encouraged many producers to resume
production, pushing the market back into oversupply.
Conditions are even worse in China’s
papermaking industry, the third major downstream consumer
of TiO2, where manufacturers are struggling
with high production costs, high inventories and a host of
other problems. According to sources in the industry, sales
have been poor this year, even during March and April, which is
traditionally the season when demand is strongest.
Oilfield minerals – clinging
Despite the revision of bid prices by
India’s Andhra Pradesh Mineral Corp. (APMDC) in
its barite tender in May this year, Indian exporters are
struggling to sell material to regular markets as they fail to
compete with Chinese and Moroccan supplies.
Sources told IM that the latest
bid prices established by APMDC at levels of Indian rupee (INR)
6,050/tonne ($95/tonne), for specific gravity (SG) SG 4.2
material (Grade A), remains high against low-cost supply from
This has disrupted the market for Indian
exporters aiming to sell material into Middle East, one of the
largest buyers of drilling grade barite from the country.
According to sources, the price of products being
sold into the Middle East on a CIF basis is currently hovering
around $150/tonne for Grade A material, while Indian quotes are
exceeding this benchmark once freight, insurance and packaging
costs are included, squeezing margins.
IM learned from sources that in
order to compete in prevailing market conditions, Indian barite
miners either need to reduce production volumes or revise
prices down further to the INR 4,500/tonne ($71/tonne)
The absence of Indian barite from the market in
the first half of 2015, while the government and domestic
suppliers wrangled over the terms of the mining and export
tender, proved to be detrimental to Indian exporters, as buyers
managed to secure alternative bargain supplies from other
Production remains in full swing in the
Mangampeta mines of the Kadapa district in Andhra Pradesh,
however, despite overcapacity and low consumption rates in
oilfield drilling globally.
The tender for 400,000 tonnes crude drilling
grade barite, comprising 300,000 tonnes SG 4.2 material and
100,000 SG 4.1 material, was concluded in May this year.
The contracts went to a handful of locally-based
bidders, with no international companies contending for
allocations, even though the auction was open to foreign
Among the successful bidders for SG 4.2 barite
were Ashapura Group, Oren Hydrocarbons and Trimex, while IBC
Ltd, successfully bid for 50,000 tonnes SG 4.1 material for a
period of six months.
India aside, drilling grade barite has so far
confounded expectations of a downturn in prices as a result of
softness in the oil and gas industry – but sources
conceded that selling values are coming under strain.
More than 90% of the barite mined globally goes
into the oilfield market, leaving the industry highly exposed
to volatility in oil prices.
Oil prices currently stand at around $60/barrel,
having posted slight gains in June.
Refractory minerals – thin
Flake graphite prices have dropped by as much as
32% since the first quarter of this year, as sluggish demand in
European markets and overcapacity in Chinese refractories
failed to generate a recovery in demand, according to data
compiled by IM.
Grades of -100 mesh and fines experienced modest
demand and slightly improved prices in the winter months,
however, this recovery was scuppered by an increase in supply
Larger mesh grades, including +100 and +80 mesh
flakes, felt downwards pricing pressure as the industrial
markets they serve continue to see slow demand, particularly
for producers in Shandong province that ship out of Qingdao
While no significant trend has been observed in
graphite prices since May, export prices from China were down
by $20-30/tonne in June, bearing the brunt of weak demand in
Flake graphite prices declined by Rmb 100/tonne
($16.30/tonne) in June, following a reduction of Rmb 200/tonne
($32.60/tonne) in May in the domestic market, which further
affected the prices of magnesia carbon bricks and alumina
magnesia carbon bricks.
IM assesses flake graphite
prices for 94-97% C (FOB Qingdao), +80 mesh, to be around
$900/tonne after dropping from the highs of $1,050/tonne seen
at the beginning of the year. The price of +100 mesh to -80
mesh, 94-97% C (FOB Qingdao) is $750/tonne, while -100 mesh,
for the same carbon content, stands at $650/tonne (FOB
Weak business in the Chinese fused magnesia (FM)
market has put pressure on prices, although most suppliers have
managed to retain offers at steady levels, sources told
Prices for FM (97% MgO, lump, FOB China) are
reported to be within IM’s
currently published range of $530-590/tonne. Sources said that
some suppliers had been able to firm up prices at the lower end
of this range, with a narrower price spread of $550-560/tonne
(FOB China) covering the bulk of trades in mid-June.
Deals are still being negotiated at
$530-550/tonne for larger orders, however, as many producers
are holding significant amounts of material in stock and are
keen to reduce inventory.
According to the latest export data from Chinese
customs, the volume of FM exported from China between 15 April
and 15 May 2015 was 35% lower than the same period in 2014, at
25,204 tonnes compared to 38,792 tonnes last year.
The value of the exports was down by 37.4% y-o-y,
the figures showed, at Rmb 14.66m ($2.35m), compared to Rmb
23.43m ($3.77m) for the same month in 2014.
For deadburned magnesia (DBM), weak global
trading activity had left prices unmoved between May and June,
sources in the industry told IM.
According to figures quoted by industry observers
at the IM MagMin 2015 conference in Athens,
Greece, in May, China exported 663,000 tonnes DBM last year, up
39% on 2013.
The latest export data from China showed that
China shipped 55,298 tonnes DBM between mid-April and mid-May
this year, up 72% on the previous month and an increase of more
than 10% over the 2014. The total value of exports was Rmb
16.18m ($2.6m), flat with the same period last year, while the
average export price was reported at $293/tonne.
IM’s prices for
DBM, 90% MgO currently stand at $220-250/tonne, FOB China.
Ex-works Chinese prices for this grade are reported to be
around Rmb 780-820/tonne ($125-132/tonne).
Prices for 92% MgO material are $250-270/tonne,
FOB China, according to the IM Prices
Database, while 94-95% MgO DBM is priced at
IM’s prices for
97.5% MgO DBM stand at $370-400/tonne. Ex-works Chinese prices
for 97% min MgO material are reported to be in the Rmb
1,450-1,550/tonne ($233-249/tonne) range.
The slowdown in the graphite
sector has triggered a price war amongst suppliers over market
share, especially for medium and finer mesh material.
In order to secure regular cash flow, Chinese
producers have tried to penetrate the market with low-price
levels, which has had a knock-on-effect on similar grades
elsewhere in the world, particularly material imported into
China’s flake graphite mining
industry has faced rising environmental restrictions since H2
2014, which has caused output from many producers to become
intermittent, especially in Shandong and Pingdu. Sources told
IM that some producers have moved to
Heilongjiang to open factories in order to avoid stricter
This created a more competitive environment,
which has been further compounded by drop in the value of euro
against the US dollar, the impact of which is being reflected
in the latest prices.
IM has also discovered that some
flake producers are selling at below cost just to retain their
customers, as market participants foresee prices going down
further as a result of the weak Chinese refractories market and
thin European demand.
Volatility in graphite prices is likely to
prevail in Q3 2015 and many in the Chinese market expect this
year will be worse than 2014.
For magnesia, market participants said that the
softer conditions could be explained by a seasonal slowdown in
industrial activity for the summer, but others pointed out that
trading has been scant for a number of weeks.
Local media reports in China suggested that some
companies had halted production towards the end of H1, while
others were getting ready to reduce prices ahead of bidding for
a second half-yearly quota allocation of FM.
IM learned that attempts to
rationalise the Chinese magnesia industry and cut the number of
producers in an effort to prevent price wars is having limited
success, while smuggling remains a problem and creates a
two-tier pricing situation.
Non-Chinese DBM producers have blamed the flood
of Chinese material onto the market for the decline in prices
over the last two years, with falls of around 30% reported
since 2013 for some grades.
*Conversions made May 2015
Full information on all
IM’s prices can be
found on the IM Prices
Database online at