Prices

By IM Staff
Published: Thursday, 15 December 2016

Antimony trioxide prices drop, as do iodine prices; lithium deals for 2017 approach closure; foundry chromite spot market widens; raw material costs lift WFA prices; graphite suppliers talk 2017 contracts; Cristal to increase TiO2 prices; industry concerned over China scrapping magnesia quota.

IM’s full price listing is only published online. If you have any comments or concerns, or wish to discuss any of the grades or prices listed, please contact Barbara O’Donovan, Industrial Minerals editor bodonovan@indmin.com.


Antimony trioxide

Antimony trioxide prices drop as producers dump material

Myles McCormick, Yoke Wong

Antimony trioxide spot prices fell at the end of November as some producers offloaded stock at lower prices, keen to convert holdings to cash as year-end approached.

The drop-off came despite reports that some producers were cutting production, further crimping supply amid a lower export quota for material out of China. But the impact of reduced supply was offset by weak demand. Consumption for the flame retardant mineral, which is mainly used in cables, has been dampened by poor electronic goods sales.  

A degree of uncertainty remains about price direction in the coming months, however, one Asia-based trader noting that "the economic situation is unknown" adding that he thought buyers will "just buy however much they need", rather than stocking up.

Following IM’s assessment on 24 November, antimony trioxide spot prices (99.5% Sb2O3) dropped to $6,200-6,300/tonne on an FOB China basis, down $125/tonne compared with the average price in October.  

Antimony trioxide for delivery in Europe on a CIF Antwerp/Rotterdam basis also fell to $6,300-6,500/tonne, down nearly $100/tonne compared to the average price in October. Europe-origin material tends to sell at a premium to Chinese product, but buyers are increasingly attracted to the cheaper Chinese material.     

Meanwhile US prices, on a CIF New York basis, also dropped to $6,400-6,600/tonne at the end of October from $6,600-$6,700/tonnes at the end of November. The US has to rely heavily on imports, due to there being no domestic production according to market participants.

As the key raw material for antimony trioxide is antimony ingot, the flame retardant mineral would normally rise and fall 

in tandem with the antimony metal price, which has also dropped over the past two months.

According to IM’s sister publication, Metal Bulletin, antimony metal prices (free market, in warehouse Rotterdam, max 100 ppm Bi) stood at $7,250-7,450/tonne on 23 November, down from $7,650-7,950/tonne at the beginning of October.

Antimony trioxide, typically 99.5% Sb2O3, 20 tonne lots
FOB China, $/tonne 
prices1  
Source: Industrial Minerals 


Iodine

Iodine price optimism short lived

Myles McCormick

The spot price of iodine crystal continued its downward trajectory in November as producers competed for market share, dampening hopes of an uptick in the market predicted by some.

The spot price for iodine crystal (min. 99.5%, packed in drums) dropped to $18.5-21/kg for material delivered to the US and Europe or on a CIF basis to Asia, according to IM’s market assessment on 24 November. This is down $1/kg compared with the $19.5-$21/kg in October.

At least one Chilean supplier has lowered its offer to $18.50/kg for spot iodine delivery, IM heard.  

The spot price of iodine crystal has been under pressure and falling consistently for most of 2016 as major suppliers battle it out for market share, pushing ever more material onto an already oversupplied market.

Participants had speculated in late-October that the slide might be drawing to an end, however, with some speaking of a "concerted effort" to achieve price recovery, following indications that at least one large producer would not sell at prices below $20/kg.

However, IM heard in November that prices continued to drop amid market-share competition.

"The price is still under downward pressure, but not as intensely," said one Chile-based supplier, predicting that it may flatten out early next year, but an uptick would take longer. "We don’t see an increase until next year."

There had been an assumption among market players that higher cost producers would exit the market amid the pricing war, allowing lower cost producers to take their market share, but this has not yet proved to be the case, causing producers to continue to drop their selling prices.

The contract price of iodine crystal (min. 99.5%, packed in drums) for Q4 remained static at $20.5-22/kg, though some predict this will follow the trajectory of the spot market in 2017. 

Iodine crystal, 99.5% min, drums, spot, $/kg 
prices2  
Source: Industrial Minerals 


Lithum

Lithium deals for 2017 grind towards closure

Myles McCormick

After lengthy negotiations, deals on 2017 annual lithium contracts were starting to be finalised at the end of Novmeber with a number of completed transactions now reported to IM.

Prices have risen significantly from 2016, with market participants arriving at deals around double last year’s range, at levels similar to the current quarterly price range.

Buyers have expressed frustration at the price hike, but relief at locking in supply for the year.

The protracted contracts talks have taken longer-than usual, however, and at the time of publication not all deals had been concluded. "There is still some hesitancy and uncertainty in the market," one large lithium carbonate buyer told IM.

Prices offered have varied widely, with previous relationships, quantity, supplier strategy, consumer size, commitment term and end-market type all playing a role.

Suppliers have insisted they are trying to support particular end markets, such as glass, which are suffering from the high price dynamic.

But buyers have complained that the opposite is the case in some instances, with reports of grease markets being hit with higher lithium hydroxide prices than battery markets.

With deals continuing to close, IM expects to set its 2017 price range in December.

In late November talks remained in progress, with some buyers going back and forth between suppliers and downstream customers, in an effort to placate the latter group, who will have the higher cost of materials passed on to them.

"We are playing ping-pong," said one lithium hydroxide buyer, adding he was anxious to show he was trying to get a better deal, for the sake of downstream relations, although he was doubtful much improvement on offer prices would be possible.

Buyers’ frustrations

During the 2017 supply contract talks in the past few months, buyers have expressed frustration about the one-sided nature of the negotiations.

In what one buyer described as "definitely a seller’s market", lithium producers are all seeking higher prices and changes to traditional contract terms.

Following the lead of China’s spot market earlier in the year, offer prices of both lithium carbonate and lithium hydroxide in 2017 annual deals were well above those paid on current year annual contracts, based on offers reported to IM.

"The price will double compared to last year," predicted one large buyer.

In lithium hydroxide, IM had heard offers ranging from $12/kg to $20/kg for product from Western suppliers and offers in the mid-20s in dollars-per-kilo terms ex-China.

This would represent a significant rise on the roughly $8-9/kg paid on contracts set this time last year.

Meanwhile, lithium carbonate offer prices were largely reported in the low teens ex-South America while Chinese offers tended to be in the mid-teens.

2016 supply contracts for lithium carbonate tended to fall between $6-7/kg.

Because hydroxide remains a significantly smaller market than lithium carbonate, those requiring larger volumes of the material are being asked to pay higher prices than those looking to buy small quantities, with sellers aware that buyers’ options are limited.

But producers have insisted that the tight market conditions necessitate higher prices, with one recently indicating to IM that without a notable change in the supply picture going into 2017, expectations of a price drop from current quarterly price levels were unlikely, while another criticised what he saw as unrealistic expectations among some buyers. 

They said deals would be tailored to different customers, with factors such as prior relationship, size and market segment all being taken into account.

John Mitchell, lithium president at Albemarle Corp., a major supplier, told investors on a recent earnings call that the company did not want to take advantage of customers in the current market dynamic. 

"Our relationships with some customers go back decades (...) we are really focused on making sure we grow together (...) and we want to treat customers fairly," he said.

Contract changes

Outside of pricing, contractual clauses relating to longer commitments are also being sought, much to the ire of some buyers.

Two major suppliers are said to be pushing for three year deals, whereby customers get a set price for an initial year and commit to certain volumes over the long term, with the latter year prices to be negotiated at a later stage within a predetermined range, based on market price.

Clauses have been inserted in some instances demanding mandatory compensation in later years should the customer decline to continue to buy from the same supplier.

In others, suppliers are looking for buyers to commit to giving them a guaranteed set percentage of their business in subsequent years.

While in some cases the long term deals entail lower prices, at least in the first year, the prospect of being tied in to purchasing from the one producer for more than a year remains unattractive to some buyers.

"We know the market will be tight for a couple of years. But lots of things will happen. We don’t want long terms contracts with suppliers. We prefer to see what happens (…) Next year we may decide we want to get more business from one than another," one buyer told IM.

Such deals might be more suited to automotive producers such as Tesla, he suggested, where companies are under significant pressure to produce vehicles and the cost of lithium remains a small part of their overall cost.

"For them, lithium is just the salt in the salad. They will pay what they need to," he said.

Faced with this somewhat one-sided market dynamic, some buyers are looking to split their supply requirements more so than they would have in past years.

Lithium carbonate, min 99-99.5% LiC2O3, spot contracts,
China, $/kg 
prices3  
Source: Industrial Minerals 


Chromite

Foundry chromite spot market widens

Davide Ghilotti 

The spread between prices for foundry grade chromite sand widened through the course of November, prompted by upward pressure on the Asian market in contrast with a slower Europe.

Price pressure affecting chrome grades across the board has generated increases for foundry grade material as well, although the price movements have not been as uniform as in metallurgical or chemical grades.

As highlighted since October, while the market for foundry sand is moving upwards, it also appears to have taken different directions depending on destination.

Asia – especially China – has shown a strong flow of demand of late, with multiple enquiries for both prompt shipments in December and 2017 early-quarters deliveries, multiple suppliers told IM. 

This scenario, combined with an underlying situation of low supply from South Africa compared with 2015, prompted a rapid increase in spot prices for foundry sand to Asian destinations.

In Europe the market has been slower to react, and prices have not reached the levels seen in China.

Reasons for this include lower levels of demand from local buyers and, in some cases, the existence of some unsold quantities of material available for sale in European warehouses, in the hands of traders. 

A progressive inventory clearance would support an uptick in the European market, although sources are unsure as to how much material is in question and how long it would take for the local market to absorb it.

Foundry grade chromite sand, 46% Cr2O3, wet bulk, was trading in a range between $370 and $410/tonne FOB South Africa, according to an IM assessment on 17 November.

The assessment shows an increase compared with the average price of $287.50/tonne in October, as well as a widening spread between offers on the low and the high end of the range.

Chromite, foundry, 46% Cr2O3, wet bulk, FOB South Africa, $/tonne 
prices4  
Source: Industrial Minerals 


White fused alumina

Spiralling raw material cost lifts WFA price

Yoke Wong

The spiralling cost of raw materials is lifting white fused alumina (WFA) spot prices as Chinese producers raised their offers, market sources told IM.

Alumina is the key raw material used to produce WFA, and recent restocking from Chinese aluminium smelters have pushed prices up by about 40% since October.

Chinese domestic alumina prices was assessed at a range of Chinese renminbi (Rmb) 2,700-2,850 ($390-412)/tonne on a delivered in China basis, according to IM’s sister publication Metal Bulletin on 24 November, up 18% from the average of Rmb 2,344/tonne in October.

Driven by the uptrend in China, alumina prices elsewhere in the world are also rising. Inferred alumina index on a FOB Brazil basis, the reference for European smelters, was calculated at $318.47/dry metric ton, up $17.02/tonne compared to a fortnight previously, according to Metal Bulletin in end-November.

As smelters’ alumina purchased volumes are often much bigger compared with WFA producers, with the average standard cargo size at 30,000-35,000 tonnes, the former could secure lower volume-related prices.     

One WFA producer in China has quoted alumina prices as high as Rmb 3,000 ($433.50)/tonne, and he had to raise his WFA offers to reflect higher raw material and production costs.    

Spot refractory-grade WFA (99.0% Al2O3 min, in 25kg bags) prices were assessed at €650-680/tonne on a CIF Europe basis, up compared with €625-650/tonne in end-October, according to IM’s assessment on 24 November.   

Materials for spot delivery in Germany traded in the region of €680/tonne on a DAP basis, one Europe-based producer told IM.    

Stronger demand, reduced supply in China Due to the Chinese government’s anti-pollution crackdown on many production facilities in China since July, many fused-alumina plants that did not meet environmental standards were shut down. The shutdowns were particularly severe in Henan province, one of the main regions for fused-alumina production.

As a result, reduced WFA supply amid firm domestic demand is supporting prices in China, producers in the country said.        

Chinese-origin WFA were trading in the region of Rmb 5,000 (€682.45)/tonne on an ex-work basis within China, according to two suppliers.    

In contrast, WFA supply in Europe was not disrupted and the region remained well-supplied amid weak refractory demand. Consequently, European product prices did not receive the strong boost like its Chinese counterpart.   

China is one of the biggest fused alumina producer in the world.

Alumina, fused, white, 25kg bags, CIF Europe, €/tonne 
prices5  
Source: Industrial Minerals 


Fluorspar

Fluorspar prices remain stable amid increasing supplies

Kasia Petal, Albert Li

Metspar spot prices have remained largely stable in Europe in November despite increased supplies reaching Turkey, market sources told IM.

Turkey is receiving more materials from Afghanistan, Pakistan and Iran, as it is the main export destination from the three producing countries, a trader active in Turkey told IM. 

IM does not currently assess metspar (85% CaF2) prices for delivery in Turkey but spot contracts for Afghan-origin material were traded at $260-270/tonne on a DAP basis, according to the trader.

At the same time, suppliers in neighbouring Pakistan and Iran are also undercutting prices in order to gain market share in 

Turkey, and the increased competition is pressuring prices. 

"There is too much competition from products from Afghanistan, Pakistan and Iran – they can’t sell anywhere else," said the trader.

Elsewhere in the Mediterranean, one European supplier has reported increased buying activities in Spain. 

"In terms of end markets for fluorspar, some countries like Spain are seeing higher demand and more activity, but not really in other countries like Turkey," the source said.

The supplier noted that increased competition is occurring in Europe but it is not driving prices down by as much as it had done previously.

Spot metspar prices were assessed at $240-260/tonne CIF Holland, unchanged month-on-month (m-o-m), according to IM’s assessment on 24 November.

Improving steel demand is expected to support metspar consumption as the mineral is a metal smelting feedstock and is used during production. Some market participants believed that metspar prices could increase as the steel sector recovers.  

"Every other raw material into steel, such as manganese and magnesium, is seeing an uptick. I hope that eventually metspar prices will also go up," the first trader said.

Supply disruption in China

Fluorspar mining operations in northern China may stop due to the cold winter while production may also halt for a month during the spring festival holiday in January 2017, market sources told IM.

Despite the imminent supply disruption, fluorspar prices are expected to be stable due to the balance of supply and demand, sources said.

Spot metspar (min 85% CaF2) prices were assessed at $240-260/tonne, while fluorspar acidspar, 97% CaF2, wet filtercake, last traded at $250-270/tonne, both were on a FOB China basis and were unchanged m-o-m.

Fluorspar, Acidspar, 97% CaF2, Wet Filtercake, CIF,
Rotterdam to Holland, $/tonne 
prices6  
Source: Industrial Minerals 

PRICING NOTICE: Industrial Minerals will retain its acidspar, CIF US Gulf Ports price and extend the consultation period for acidspar, China to Japan. Several other fluorspar grades will be delisted.

Following a market consultation from end-October regarding the proposed delisting of several fluorspar prices the following action will be taken:

Industrial Minerals will delist the following grades, effective 30 November:

• Acidspar, 97%, Dry Filtercake, CIF, Mongolia to India [USD/tonne]
• Acidspar, 95.5% CaF2, EXW, India Domestic [INR/tonne]
• Acidspar, 92.5% to 95.5% CaF2, EXW, India Domestic [INR/tonne]
• Metspar, 90% to 92.5% CaF2, EXW, India [INR/tonne]
• Metspar, 85% to 90% CaF2, EXW, India [INR/tonne]

Industrial Minerals will continue to publish the following grade that had previously been proposed for delisting:

• Acidspar CIF US Gulf Ports [USD/tonne] 

Industrial Minerals will extend the consultation period regarding the proposed delisting of the following grade of fluorspar:

• Acidspar, 97% CaF2, Dry Filtercake, CFR, China to Japan [USD/tonne]

If you have any comments please contact Industrial Minerals head of market reporting Yoke Wong at yoke.wong@indmin.com


Graphite

Graphite suppliers talk 2017 contracts

Davide Ghilotti

The graphite market has remained stable over November as negotiations have started between suppliers and consumers over new contracts for 2017.

Sources handling graphite production in Europe told IM "many" discussions are ongoing to set volumes and prices for next year’s contracts, although nothing has been formalised as of yet.

"It’s early to talk 2017 prices at the moment," a European supplier said.

He and other sellers said market prices continue to remain stable, both in Europe and in Asia.

In China, the spot market has seen notable activity in early November albeit price levels have so far remain unchanged.
IM was told by local suppliers that a number of sales have taken place, with all reported within existing price ranges.

Chinese flake graphite, 90% C, -100 mesh is trading between $450-500/tonne FOB Qingdao, while the same material on an FOB Henan basis is at $420-520/tonne.

Higher purity product, 94-97% C, also remained unchanged in China: +80 mesh was traded at $850-950/tonne, while -100 mesh stood at $550-700/tonne, and +100 -80 mesh sold at $700-800/tonne, according to IM’s assessment on 3 November.

As for Europe, prices for high purity refractory grade graphite (94-97% C, +80 Mesh, CIF Europe) remained at $750-850/tonne, while medium mesh graphite grade (94-97% C, +100 Mesh -80 Mesh, CIF Europe) stood at $700-750/tonne.

Chinese amorphous graphite, 85% C, -100 mesh sold at $680-800/tonne FOB, on a par with previous deals.

Overcapacity

A market participant based in North America told IM that overcapacity remains the underlying cause of market flatness.

"The demand today is requiring about 60% of today’s worldwide capacity," he said, questioning the business models of both existing companies and junior projects that are seeking to add new capacity.

As IM reported in October, China-based Southern Graphite – the largest producer of amorphous graphite globally – confirmed it plans to expand its amorphous output by 200,000 tonnes by next year, citing the will to move away from low-value ore to higher-purity products that command price premiums.

This is a trend IM has seen happening across the board.

A European producer noted 3 November that "all major producers are trying to produce higher purity products to target applications that offer better pricing", adding that this will "force change on the market".

At the same time, the flatness seen in the past months has led to a build up in inventory levels, both in China and elsewhere.

Sourcing graphite is not a problem today, an Indian seller said, citing that any real rebound in the market would have to be preceded by a significant reduction of stocks across the board.

Graphite, flake, 94-97% C, +80 mesh, FCL, CIF Europe port, $/tonne 
prices7
Source: Industrial Minerals 


Pricing notice: Update on proposed delisting of graphite prices Industrial Minerals has delisted the prices of several grades of graphite from the beginning of December.

Following market consultation started in October, Industrial Minerals will delist the following grades of graphite, effective 8 December:

• Africa Flake, 80-82% C, No Mesh Stated, EXW, Africa [USD/tonne]
• Africa Flake, 84-86% C, No Mesh Stated, EXW, Africa [USD/tonne]
• Africa Flake, 88-90% C, No Mesh Stated, EXW, Africa [USD/tonne]
• Africa Flake, 92-94% C, No Mesh Stated, EXW, Africa [USD/tonne]
• Austria Amorphous, 75% C, Ore, EXW Austria [USD/tonne]
• India Flake, 90-94% C, +50 Mesh, FOB, India [USD/tonne]
• India Flake, 90-94% C, +80 Mesh, FOB, India [USD/tonne]
• India Flake, 90-94% C, +100 Mesh, FOB, India [USD/tonne]
• India Flake, 90-94% C, -100 Mesh, FOB, India [USD/tonne]

Industrial Minerals will extend the consultation period for the proposed delisting of the following graphite prices until the end of January 2017:

• Vein, 99.1% C, +1 Mesh, FOB, Sri Lanka [USD/tonne]
• Vein, 99.1% C, -200 Mesh, FOB, Sri Lanka [USD/tonne]
• Vein, 91% C, -8 Mesh, FOB, Sri Lanka [USD/tonne]
• Vein, 93% C, +60 Mesh, FOB, Sri Lanka [USD/tonne]
• Vein, 96% C, -200 Mesh, FOB, Sri Lanka [USD/tonne]
• Vein, 98% C, +8 Mesh, FOB, Sri Lanka [USD/tonne]

If you have any comments please contact Industrial Minerals head of market reporting Yoke Wong at yoke.wong@indmin.com

Magnesia

Industry concerned over China’s magnesia quota affair

Albert Li, Davide Ghilotti

Market participants were taken by surprise by China’s elimination of the export quota system for magnesia products and are concerned about how this could impact market prices, as some Chinese sellers have reported cases of order cancellations from customers.

As the Chinese government did not include magnesia in its list of export quotas released at the end of October, local and international companies alike are now at a loss as to what to expect on the market in the coming months and years (see p8).

IM was told of instances in which international customers cancelled the orders they had already placed with Chinese suppliers, in the hope of a price decrease next year due to no export restriction.

"Some customers have indeed cancelled orders, except those who regularly use magnesia as source material because they cannot stop production," a local producer told IM.

The effect on prices is at the heart of the debate: the sector has expressed concerns over whether the scrapping of the quotas will lead to Chinese magnesia flooding the international market, instigating price wars and oversupply.

The government has yet to release an official statement to address these issues, but local companies are not expecting a U-turn. One company said that, at this time of the year, firms are usually busy with quota-related paperwork and procedures. None of this has happened this year, he added.

In Europe, the sector is equally uneasy.

"As things stand right now, it is very difficult for us to judge the global developments created by government interference," one German-based source handling magnesia told IM.

There is a degree of scepticism among sources on the potential for a swift drop in global prices. A contact based in Germany stated that it is not a given that the savings Chinese suppliers will make from not paying for quotas will necessarily translate into lower offers on their end.

At the same time, the main threat magnesia sellers fear that there could be a drastic increase of supply from China to the international market, as companies that could not previously afford quotas will now be able to export freely.

As a consequence, this could generate fierce price competition between new exporters who vie for market space and drive overall prices down at a time of weak global demand.

Another European supplier told IM: "If China opens the gates for magnesia exports, a large amount of magnesia that is not consumed [within] the country will be exported."

While IM has heard from some suppliers in China that the no-quota system would mean savings on their part, for others the cancellation spells bad news for prices going forward: "Now the price is at the bottom already," one local company said. "If the quota is cancelled, this industry is doomed."

In the meantime, prices of magnesia products - including dead burned and caustic calcined magnesia - out of China have remained flat, according to the latest IM assessment on 1 December.

Magnesia, deadburned, 92% MgO, lump, FOB China, $/tonne 
prices8  
Source: Industrial Minerals 


Tio2

Cristal to increase TiO2 prices

Kasia Patel

Global titanium dioxide (TiO2) producer Cristal has announced a number of price increases for its TiONA and TiKON products in end-November, effective 1 January 2017.

Prices for its TiO2 products in Latin America are set to increase by $200/tonne, while prices in Eastern and Western Europe will see an increase of €200/tonne ($212*). 

Russia and CIS region prices will increase by $150/tonne.

TiONA and TiKON prices in the Middle East and Africa will increase by $150/tonne, or by €200/tonne in euro-priced markets.

Meanwhile TiO2 prices for Asia Pacific will also increase by $150/tonne.

The price hikes are in addition to increases announced earlier this year in August, which were implemented at the start of 

September. These follow similar price announcements made by Huntsman Corp. at the end of October. 

Earlier this month, leading TiO2 producer The Chemours Co. also confirmed it planned to continue driving moderate price increases for its products following a positive third quarter. 

*Conversions made November 2016 

Titanium dioxide pigment, bulk, CIF US, $/tonne 
prices9  
Source: Industrial Minerals