prices continued to slide in 2016, as the battle for market
share between major producers in Chile saw the market remain in
the end of the year, there were indications that a price floor
may finally be in sight, with producers hinting they would not
cut prices further.
Quimica y Minera SA (SQM) and Cosayach, Chile’s
two largest suppliers of iodine crystal, were at loggerheads
during most of 2016, as each company vied for a larger share of
the market at the other’s expense.
observers expressed confidence that persistently low prices
would push high-cost producers out of the market, leaving
larger players to swoop on the resulting supply opportunities.
These predictions failed to materialise, however, as even small
producers clung on to their positions.
and related compounds are mainly used in the healthcare market,
in x-ray contrast media and pharmaceuticals, as well as in
liquid-crystal-display (LCD) screens and iodophors.
demand for LCDs and x-ray contrast media is expected to
underpin incremental demand increases in the coming years,
however the trend in 2016 was merely flat to slightly positive,
reflecting end market growth patterns.
battle for market share between SQM and Cosayach drove spot
prices down throughout 2016, from $27-30/kg at the beginning of
the year to $19.50-21/kg in late November. Q4 contract prices
were around $20.50-22/kg.
prices at the end of 2016 were less than a third of the peak
$60-95/kg range reached in 2011, following the Tohoku
earthquake and consequent tsunami in Japan in March of that
year, and are around 40% down on their pre-spike levels of
2011 as Japan recovered from the effects of the disaster and
new supply came online in Chile, prices have steadily eroded.
Some industry observers have speculated that, at current
prices, some Chilean producers must be selling material below
November, iodine market participants suggested they might
engineer a halt price declines. At least one major supplier
indicated that it would not sell iodine below $20/kg, while
various distributors spoke of "a concerted effort" to push
has as yet been no concrete evidence of this predicted uptick
materialising and suppliers will need to unite in setting a
price floor in order to establish a meaningful
production cuts to soda ash capacity in 2015 failed to prevent
the oversupply persisting throughout the last year, as new
production came online while demand wavered.
early January soda ash inventories in China were reported to be
low and restocking coincided with supply disruptions resulting
from a wastewater dam failure at Shandong Haihua Group Co.
Ltd’s 3m tpa soda ash facility in Weifang. These
factors contributed to a price rebound, but the market
continued to worry about surplus volume from
China’s 29m tpa soda ash output flooding export
in January, Uzbek state-owned JSC Uzkhimprom doubled its soda
ash capacity to 200,000 tpa and in March, Turkish industrial
group Teyo Yatrim Ve Dis Ticaret AS announced plans to build a
new soda ash plant in Belarus’ Gomel
potentially tough market conditions ahead, in April
Belgium’s Solvay SA decided to idle 105,000 tpa
soda ash capacity in Egypt.
September, Turkey-based Ciner Group said it would bring its
long-awaited new soda ash production online in 2017 and aims to
ramp up to full capacity of 4.4m tpa at the start of
demand for flat glass in China at the beginning of the year was
linked to the slowdown in the country’s real
estate and construction industries, although consumption by
detergent and chemicals began the year on a strong
March, the China Soda Ash Association said the domestic soda
ash industry made a profit of Chinese renmimbi (Rmb) 370m
($53,4m*) in 2015, the first positive return in four
government stimulus packages early in the second quarter
boosted domestic building activity and revived soda ash
consumption by the glass sector, while detergent and chemicals
markets remained solid.
after a period of recovery, the glass market stabilised while
Chinese soda ash production continued to rise, leading to
higher exports and increasing competition with North American
suppliers selling into Southeast Asia.
soda ash producers secured a $5/s.ton ($5.50/tonne) increase in
contract soda ash prices for 2016 compared to 2015, which was
less than they had hoped for. In March, Chinese producer
Shandong Haihua Group reported that soda ash prices in China
had increased by Rmb 250/tonne ($36.11/tonne) since the
previous November, owing to tighter local supply and American
National Soda Ash Corp. (ANSAC) subsequently announced it would
raise prices for US soda ash by $25-30/tonne.
soda ash producers pushed for further price increases in
October, citing higher production costs, but as yet there has
been no evidence of an industry-wide hike.
production costs in China could lay the ground for soda ash
price increases in early 2017, while positive Chinese real
estate and infrastructure data towards the end of the year bode
well for glass demand.
ash markets in other parts of the world look set to remain
trioxide prices and availability both fluctuated markedly in
2016, as Chinese government regulations influenced the market,
while consumption of antimony trioxide remained broadly flat
with the previous year.
full-year export quota for antimony ingot and alloy was slashed
by 36% year-on-year (y-o-y) to 5,673 tonnes in 2016, while the
antimony oxide quota was cut by 8% to 54,000
accounts for up to 80% of the world’s antimony
supply, so the lower export quota significantly constrained
supply, causing prices to soar from the historically low levels
seen throughout 2015.
projects in other parts of the world have been under pressure
from low prices over the last few years and few were in a
position to add meaningful volumes to the global market this
Tri-Star Resources Plc did manage to make progress with its
Oman Antimony Roaster project, a joint venture with Omani
company Strategic & Precious Metals Processing LLC. It
produced its first metal in April and in November Tri-Star said
it had increased the roaster’s throughput capacity
from 36,000 tpa to 50,000 tpa.
fundamental demand for antimony compounds remained steady in
2016, buyers responded to China’s quota cut by
rushing to make purchases ahead of Q4 to guarantee supply
through to the year end.
a frenzied mid-year period, there was a lull in the market
early in the final quarter and demand stagnated somewhat in
October. Buying picked back up again slightly in November, in
step with seasonally high purchasing activity in the antimony
trioxide flame retardant market.
trioxide prices reacted to the unexpected supply shortage this
year. Prices of $4,600-4,700/tonne FOB China in January
remained relatively steady in H1, giving way to rapid increases
from July to September, taking prices up to
values were corrected back down to $6,300-6,400/tonne FOB China
in October, increasing to $6,400-6,500/tonne in late
Antwerp/Rotterdam and CIF New York antimony trioxide prices
also tracked this pattern at premiums dictated by freight and
other charges. In late November, these prices stood at
$6,500-6,600/tonne and $6,600-6,700/tonne,
a turbulent year, the antimony industry approached the end of
2016 with uncertainty, particularly regarding the future
direction of Chinese policy. Underlying demand is not predicted
to shift significantly in either direction in the foreseeable
future, however. Chinese producers are expected to continue
undercutting their European counterparts on prices.
situation in the non-metallurgical chromite sector at the end
of 2016 appeared very different to how it did in
removal of supply capacity this year has enabled the chromite
market to recover, with the general upward trend in prices
steepening over the summer months, shifting decisively to a
seller’s market as the industry approaches
output in South Africa, the single largest producer of the
mineral, fell throughout this year compared with 2015. This
particularly affected high-purity ore, with 44-48% chromium
oxide (Cr2O3) content, as underground sites where these grades
are mined became too expensive to operate.
produced the first half of 2016 fell by 16% to an average of
154,437 tpm from 184,000 tpm in H2 2015.
reduction was mainly achieved through mine closures. In the
second quarter of this year, US speciality minerals company
Minterals Technologies Inc. (MTI) closed its 100,000 tpa.
Ruighoek chromite mine and sand plant in South Africa. Coupled
with the closure of the Dilokong chrome mine in South Africa
late last year, it took a large volume of foundry grade sand
out the market.
inventories from these mines remained available for sale during
2016 and were absorbed gradually by the market.
leftover production is cleared, however, South
Africa’s status as a high-purity foundry and
refractory-grade chromite supplier will be
declining chromite consumption trends last year, 2016 saw a
progressive recovery in demand, albeit from a low
the summer months onwards, supply tightened, coinciding with a
robust rebound in Chinese demand for chemical grade chromite
and, later, foundry grade material.
overall reduction in global chromite supply meant that
inventories at Chinese ports were not replenished to the same
extent as they were last year.
India, a relatively strong steel sector this year has generated
steady demand for foundry materials, allaying fears surrounding
weaknesses in the market that had emerged in the preceding two
for most chromite grades bottomed between Q4 2015 and the early
months of 2016. Since then, the market has gradually started to
pick up, with increases becoming steeper from September
onwards. By December, spot prices were well in excess of levels
recorded in 2015.
majority of market sources agree that skyrocketing chromite
prices seen in 2016 are not sustainable in the long term and
predict that prices will start to come down next year. Price
trends will vary, however, according the availability of
last 12 months have seen further regulation of
China’s rare earths industry as the
country’s government continued its struggle to
bring this unruly sector under control.
number of active non-Chinese rare earths exploration companies
dwindled further as investor confidence all but disappeared and
the only producers of rare earths outside China have had to
strive against persistently weak prices.
January, China’s government launched a rare
earths-tracing system as part of a broader policy aimed at
improving supply chain accountability in China. It was hoped
that the tracing system would also assist in the campaign to
stamp out illegal rare earths mining, as the Chinese government
sought to control where and how rare earths are mined and
May, the city of Baotou in Inner Mongolia offered three-year
subsidies to companies to upgrade their technology for
manufacturing value-added rare earth materials and by the end
of Q1, rare earth alloy production from Baotou had doubled
year-on-year to 35,050 tonnes.
July, the Chinese government set its 2016 rare earth mining
quota at 105,000 tonnes and, in October, it unveiled the Rare
Earth Industry Development Plan 2016-2020, which revealed a
scheme to increase Chinese rare earths output to 140,000 tpa by
the end of the decade, with a 50% share of the high-value
the government of Russia approved a plan in February to
increase domestic rare earths production, which currently
accounts for an estimated 1.3% of global supply, and said it
was evaluating the possibility of lunar mining for the
joint venture (JV) between IST Group, Rostec and TriArk Mining
announced it would construct a $110m hydrometallurgical plant
in Krasnokamensk, close to the Chinese border, to process rare
earths from the Tomtorskoye deposit in Yakutia in
central-eastern Russia, as part of a $1bn project. Although the
scheme is supported by the government, the JV has yet to find
all the funding it needs to bring the mine and plant into
operation by its target date of 2021.
North Korea, the imposition of UN trade sanctions in March
following a series of nuclear weapons tests by the communist
state reportedly threatened to interrupt rare earths supply
from the country to China, Japan and Russia – however
none of these countries would own up to trading the minerals
with North Korea or being affected by the
India, the national government announced plans in April to
auction off rare earths mining blocks in the Barmer district of
Rajasthan to encourage exploration and production of monazite.
But progress in Barmer is understood to have been slow and the
main domestic supplier of rare earths continues to be Indian
Rare Earths Ltd, which recovers the minerals from beach sand
mining in the country’s southern
May, the EU-funded I²MINE project coordinated by
Sweden’s LKAB claimed to have developed innovative
deep-mining strategies capable of cutting Europe’s
dependence on imported rare earths within four years. The
€25.9m ($27.5m) project also promised to curb
environmental damage, by conducting underground mining using
new hard rock mining technologies.
Australia’s Lynas Corp. has struggled to remain
afloat amid weak rare earths prices and rising debts. In
October, the company negotiated a reduction in its debt
repayments and secured a three-year extension to the operating
licence for its rare earths processing plant in Kuantan,
Malaysia. It said that it was producing rare earth products at
around 90% of its 400 tpm design capacity in the three months
to the end of September.
are still a few exploration companies developing rare earths
projects to advanced stages, despite the gloomy market outlook.
These include Alkane Resources Ltd and Hastings Technology
Metals Ltd in Australia, Greenland Minerals and Energy in
Greenland and Mkango Resources Ltd in Malawi.
mid-2016, China’s largest rare earths miners
collectively forecast weakening financials in the second half
of 2016 as prices remained low and trading conditions
contrast, producers of neodymium-iron-boron (NdFeB) magnets
offered an upbeat assessment of the market, saying that demand
was steady for rare earth magnet materials, although this was
partly to do with the low raw material prices which reduced
Rare Earth Industry Development Plan 2016-2020 emphasised
growth in three main end markets: magnets, catalysts and energy
storage. It also encouraged the development of new applications
for rare earths, which the Chinese government hopes will
increase net consumption of the minerals, however market
observers have cautioned that it will take some years for any
breakthroughs of this kind to generate real demand.
meantime, while magnet and catalyst markets remain stable to
strong, other traditional uses for rare earths such as
phosphors and polishing powders still face oversupply and lack
the necessary growth to support prices.
guidance prices for rare earths sagged at the beginning of this
year, particularly for heavy minerals produced in the southern
provinces, before starting to rise in April after
China’s "big six" rare earths companies began
stockpiling as part of a government-backed resource protection
central government stockpile announced in June failed to lift
prices further, however, and even sent the market into reverse
as sentiment judged that there was ample supply to build stocks
and meet export demand.
fourth quarter, prices were lower than they had been a year
before but appeared to have stabilised, according to list
prices published by some of China’s largest
weight of Chinese rare earths supply is likely to continue
dragging down average prices until there is some decisive
policy move by China to shut mines, or new demand
the timing of the former is unpredictable, notwithstanding the
provisions of China’s Rare Earth Industry
Development Plan, the latter possibility is not realistic in
the immediate or short term.
market entrants will therefore have to work closely with
downstream rare earths users and tie-in purchase contracts,
since the open market is unlikely to support new supply at
began with a spate of financial losses for major titanium
dioxide (TiO2) producers, including US firms, Tronox Ltd and
The Chemours Co., setting the tone for what proved to be
another tough year for the industry.
prices and demand began the year on a downward trend, but in
the months that followed, global producers banded together to
push through a number of price increases, which began to stick
in H2. This has resulted in more positive market sentiment in
mineral sands, with ilmenite prices increasing by up to 60% in
which was spun off US chemicals giant DuPont in 2015, and
Cristal Global, owned by Saudi Arabian conglomerate, Tasnee,
remain the two largest players in the TiO2 sector. Chemours had
cut 150,000 tonnes from its TiO2 capacity last year by closing
the Edge Moor facility in Delaware and shutting down a
production line in Johnsonville, Tennessee, but in September
this year it launched a new 200,000 tonne TiO2 line at its
Altamira plant in Tamaulipas, Mexico.
Huntsman Corp. remains the world’s third largest
TiO2 producer with capacity of around 734,000 tonnes, although
last year the company announced plans to spin off its pigment
division, which it purchased from New Jersey-based Rockwood
Holdings Inc. in 2014.
July, Huntsman said it would close its smallest production
plant, the Umbogintwini facility in South Africa, in Q4 2016.
This will pull 25,000 tpa TiO2 offline, in addition to the
company’s previously announced plans to axe
100,000 tonnes of capacity in Europe.
has also shifted among producers in China, where consolidation
of the TiO2 sector is underway. China has been growing in
prominence as a source of TiO2 to the global market, as
domestic suppliers attempt to upgrade processing methods to add
new chloride-route capacity in order to compete with the West
on quality. In Q2 2016, the country exported just over 200,000
tonnes of pigment – the highest quarterly volume ever
shipped from China.
Chinese producers Henan Billions Chemicals Co. and Sichuan
Lomon Titanium Industry Co. announced plans to merge in May
2015, but the tie-up has yet to be concluded, partly because of
delays in securing funding.
a rocky start to the year, by the third quarter leading US
paint producer PPG Industries noted that overall coatings sales
volumes had increased, as industrial and packaging coatings
outpaced other markets and architectural coatings grew in North
America. However, European demand for architectural coatings
declined, as did the market in the Middle East and Africa,
while marine coatings remained weak worldwide.
mid-October, Dutch paints and coatings manufacturer AkzoNobel
confirmed that while overall sales volumes remained flat in the
third quarter, there was positive demand for decorative paints
in Asia, in addition to stronger overall consumption of
in the year, in February, AkzoNobel said it wanted to buy
BASF’s coatings division and in October, it
revealed that acquisition talks were in progress and that it
expected to complete the purchase by the end of the
also broke ground this year on its Indian powder coatings plant
in Mumbai, as it looks to benefit from fast-growing coatings
demand in the country.
1% of global TiO2 supply is consumed by the food and
pharmaceutical industries in consumer goods such as sunscreen,
toothpaste, powdered sugar and sweets. However, consumers are
growing increasingly concerned about the content of food and
cosmetics, and following public pressure in 2015, two major
bakery chains, Panera Bread and Dunkin’ Donuts,
announced they were ditching TiO2 as an ingredient from their
baked goods. This trend continued into 2016, when confectionery
producer Mars Corp. committed to removing TiO2 from its sweets
year, the French Agency for Food, Environmental and
Occupational Health and Safety (Anses) sent a proposal to the
European Chemicals Agency (ECHA) to classify TiO2 as a category
B carcinogen classification could have significant implications
under the EU’s Registration, Evaluation,
Authorisation and Restriction of Chemicals (REACH) regulation,
as substances in these categories are restricted in consumer
public consultation of France’s proposal ended on
15 July 2016. The ECHA’s Committee for Risk
Assessment has 18 months from time of receipt to adopt an
opinion on any classification and labelling proposal and
present its independent scientific opinion to the European
Commission (EC) for a final decision.
major TiO2 producers announced a number of price increases this
year, while Chinese manufacturers had attempted to push through
11 price hikes by late November.
August, Tronox reported the first sequential increase in TiO2
prices since 2012, predicting further improvement in the third
quarter as higher prices are rolled out across its customer
implemented global price hikes in January and May, followed by
a $150/tonne increase in September for its European, Middle
East and Africa and Latin American customers.
price increases in the fourth quarter were led by Huntsman,
which raised selling prices in October for all TiO2 pigments,
effective 1 January 2017.
uptick in TiO2 prices in demand in the second half of 2016
enabled producers to operate at higher capacity rates, although
the traditionally slow demand period of the northern hemisphere
winter could create a speed bump for the sector’s
momentum towards the end of 2016.
sources have expressed confidence in continued growth, saying
that current price discussions pave the way for additional
price improvements in the first half of 2017, while a recovery
in Chinese industrial activity should boost domestic pigment
political and economic uncertainty in Europe and North America
could weigh on TiO2 global demand next year.
was a tough year for fertilisers, categorised by overcapacity
and low prices for potash and phosphate. A decrease in crop
prices, refinancing in Brazil and El Nino weather patterns
affecting the agricultural sector in India continued to force
capacity cuts in fertiliser products.
January Canada’s Potash Corp. of Saskatchewan
(PotashCorp) said it would indefinitely suspend operations at
its Picadilly, New Brunswick operations, as tightening
fertiliser prices ate into margins.
low prices, Morroco-based Office Cherifen de Phosphate (OCP)
has brought a new fertiliser plant online in February. OCP,
already the largest exporter of phosphates globally, said it
aims to increase its fertiliser production to 12m tpa by 2017,
from 4.5m tpa in 2010.
contrast, North American fertiliser producer The Mosaic Co.
announced plans in February to curtail phosphate production by
up to 400,000 tonnes owing to a longer period of weak
April, Anglo American sold off its phosphate operations in
Brazil to China Molybdenum Co as part of its strategy to divest
following month, NYSE-listed Intrepid Potash Inc. announced
plans to idle operations at its West potash mining facility in
New Mexico after the company reported a loss of $18.4m in the
first quarter of 2016. The Carlsbad-based mine accounted for
42% of the company’s muriate of potash (MOP)
output in 2015, but a combination of decreasing potash prices,
high outstanding inventories and foreign competition made the
German potash and salt supplier K+S experienced a number of
supply difficulties from May onwards owing to issues with the
disposal of wastewater and tailings at a number of its German
facilities. While the company was slated to bring supply back
online in November, a major fire at one of its facilities meant
further supply delays. As such, overall 2016 production is
expected below 2015 levels.
the world’s top phosphate producer, announced
plans in July to idle its Canada, Colonsay potash mine
– which has an annual capacity of 2.6m
UK AIM-listed Sirius Minerals Plc received government approval
to develop facilities at Teesside port for the export of
polyhalite fertiliser mineral from a mine in North Yorkshire
– its last major required approval for the development
of the project.
in the UK, ICL announced plans in August to bring forward
production of polysulphate and reduce its potash output as
global prices continued to fall, resulting in 140 job
in August, BHP Billiton said it planned to put the completion
of its Jansen potash project in Canada on hold, while K+S also
said that output from its greenfield Legacy project in Canada
would be delayed until Q2 2017.
September, PotashCorp and Agrium announced plans for a merger,
which is anticipated to close in mid-2017. The newly formed
company will be one of the largest crop nutrient producers in
tightening prices in the industry, both potash and phosphate
producers continued to struggle, revealing declining revenues
for full year 2015 results announced in
noted that 2015 had been a mixed year for fertiliser minerals,
with an 18% increase in Chinese potash imports to 9.4m tonnes
being offset by an overall decline in global shipments for
potash and phosphate, as a result of lower crop prices,
currency fluctuations and weak monsoon rains, and these trends
continued into the first half of 2016.
potash contracts between producers and major Chinese and Indian
consumers are generally signed early in the year, in January
China said it would hold off on finalising contracts until as
late as April.
country, which is the world’s largest potash
consumer, had enough stockpiled material to tide it over for
the start of 2016, allowing it to defer agreements with major
potash producers, including Uralkali PJSC, Belaruskali and
paid $315/tonne for potash contracts in 2015, although by
January 2016 prices had fallen by as much as
Israel Chemicals Ltd (ICL) managed to sign an early deal with
Chinese customers in January, it gave no indication as to
prices, which it said were "established in line with prevailing
market prices in China".
deals with Chinese and Indian customers were finally signed in
June and July, however falling prices for both potash and
phosphate continued to hinder company results in the first and
second quarters of the year, despite capacity
weak demand persisted for fertiliser minerals and a number of
companies planned to divest agri-assets or reduce capacity, in
June, Canadian potash exporter Canpotex International PTE
decided to scrap plans for the development of a potash export
terminal in Canada, saying it had sufficient terminal capacity
through existing logistics networks.
for solid phosphate fertilisers came under pressure during at
the end of 2015 and in early 2016 as record Chinese exports,
seasonally slow demand in India and the US, and continued
caution in Brazil created weak demand for the
phosphate prices for Q4 2015 were however reported in line with
the previous year at $522/tonne, as liquid fertiliser prices
were more resilient and offset declines in diammonium phosphate
(DAP) and monoammonium phosphate (MAP), according to
February, phosphate prices had fallen by 30% since the fourth
quarter of 2015, and were expected to continue to do
Chinese potash contracts which had been delayed were eventually
signed in June at levels of around $227/tonne – over
30% lower compared with contracts signed in January 2015.
Potash contracts signed with Indian consumers were also agreed
at similar levels.
potash and phosphate producers announced improved sales volumes
in the third quarter of 2016, but lower y-o-y prices continued
to restrict notable improvements in earnings.
BAUXITE AND ALUMINA
and alumina markets remained subdued throughout 2016, as a
handful of closures and mergers reshaped the sector in North
America, Europe and Asia.
saw the closure of Alcoa Inc.’s Point Comfort
plant and Sherwin Alumina Co.’s refinery, both in
Texas. The Sherwin shutdown, announced in August, was part of
the company’s Chapter 11 liquidation process. The
firm was a casualty of the bankruptcy of one of its main
customers, US-based Noranda Aluminium Holding Corp., the
Europe, French industrial minerals conglomerate Imerys SA
bought the fused alumina businesses of another French company,
Alteo, consolidating supply of this material in the
maintained its restrictions on exports of unprocessed
metallurgical bauxite this year. Some industry observers had
suggested that the embargo could result in non-metallurgical
bauxite being diverted into metallurgical markets, although to
date there has been no meaningful supply or price indication
that this has taken place.
clampdown on its most polluting industries led to domestic
closures of fused alumina and refractory-grade bauxite
production facilities throughout 2016, while restructuring of
the country’s oversupplied steel sector further
weakened demand for refractory materials, including
stubbornly low global oil and gas prices severely dampened
demand for bauxite-based ceramic proppants in the fracking
closure of Alcoa’s Point Comfort plant and the
bankruptcies of Noranda Aluminium and Sherwin Alumina dented US
non-metallurgical alumina supply. Of the facilities that were
shut down, between 10% and 20% of their output was estimated to
have been non-metallurgical aluminas.
cessation of Sherwin’s operations led German
functional fillers producer Nabaltec AG to halt production at
its US subsidiary, Nashtec LLC, after its main source of
alumina was cut off. The company is temporarily supplying local
customers from its German site while it investigates options
for reopening Nashtec.
July, Imerys announced its acquisition of three of
Alteo’s four plants, making white fused alumina
(WFA), brown fused alumina (BFA) and tabular alumina. The deal
effectively reduces Alteo’s operations to a single
calcined alumina facility in Gardanne.
Orbite Technologies Inc. finally started its high-purity
alumina (HPA) plant in Quebec in October, although the company
cut production after less than a month of operation, saying it
had enough material to calcine 10 tonnes HPA, meeting its
Chinese government’s stricter stance on pollution
led it to enforce regulations requiring domestic alumina plants
to use natural gas rather than coal for fuel generation in the
first half of this year. Following a series of inspections in
the summer, many facilities were forced to close – a
move that was most likely designed to curtail supply and rid
the market of inefficient capacity.
Malaysia, metallurgical bauxite mining was banned for most of
the year to reduce stockpiles.
fragile state of the global steelmaking industry continued to
drag on bauxite and alumina-based refractory materials demand
in 2016 and even a rebound in Asian and North American steel
production from the second quarter had not fed through to
refractories by the end of the first half.
demand for refractory bauxite decreased significantly this year
as the country curbed its steel overcapacity, although market
participants reported stronger domestic demand for BFA and WFA
North America, some alumina suppliers have sought to fill the
gap left by Sherwin, Noranda and Alcoa. Alumina trihydrate
(ATH) maker Southern Ionics Inc. told IM the closures had left
"a large void" in the market and that it is intends to expand
its production of wet, dry hydrate and calcined alumina for
chemical, ceramic, glass and refractory use.
proppants had a tough year, with oil prices falling to historic
lows of below $40/barrel (bbl) in January, slashing drilling
activity and with it demand for oilfield minerals. Higher-cost
fracking activities for shale oil and gas bore the brunt of the
stoppages and demand for bauxite-based ceramic proppants, which
are more expensive than frac sand, slumped.
producers gradually reduced output throughout 2016, but most
maintained operations at low volumes or kept plants in
production-ready status in the hope that oil prices will soon
move back to sustainable levels.
speciality aluminas, such as ATH for flame retardant
applications, saw robust demand in 2016. As western countries
move away from bromine-based halogenated flame retardants on
safety grounds, demand for ATH-based products is
bauxite and alumina producers are steering clear of traditional
end markets where possible. Australian Bauxite Ltd kicked off
production at its Bald Hill mine in Tasmania in August and is
targeting a number of speciality sectors, including cement and
bauxite prices remained flat during the early part of 2016
before low demand caused them to fall in a weak downward trend
that characterised the market for most of the year.
alumina market, BFA prices were supported by supply disruptions
caused by intensifying environmental controls in China over the
summer months, while WFA prices were mostly stable, with a few
upticks in Chinese prices in H2.
third quarter of this year, a 30% reduction in the maximum
loads of Chinese trucks resulted in an immediate increase in
logistics costs for China’s alumina producers,
although a corresponding rise in sale prices has been slow to
closure of some US alumina capacity may help rebalance the
North American market in line with demand in 2017.
closures may also tighten supply there and eventually trigger
price rises, although there have so far been no definitive
signs of the market strengthening.
Europe, Imerys’ increased share of the alumina
market could give the company the power to push through some
price increases in the near future.
prices fell to new lows in the first half of 2016 amid weak
demand and overcapacity. Steel market demand for metallurgical
fluorspar (metspar) remained soft, despite an upturn in
steelmaking globally from the second quarter, while capacity
closures were offset by new production coming online in Asia
and South America.
January, Belgian chemicals group Solvay SA abandoned operations
at its fluorspar mine in Chiprovtsi in Montana province,
Bulgaria owing to the depletion of fluorite reserves and
sluggish market conditions, taking almost 30,000 tpa acid-grade
fluorspar (acidspar) offline.
inventory levels restricted buying activity, while new capacity
from projects in Thailand, Afghanistan and Argentina weighed on
metspar prices in early 2016.
February, falling demand and prices for fluorspar forced Kenya
Fluorspar Co. to once again suspend operations at its Kenyan
mine from the end of April, taking 77,000 tpa out of the
challenging industry conditions, in May, AIM-listed Tertiary
Minerals Plc managed to secure a £500,000 ($624,680)
investment to further its fluorspar projects in Nevada, US, and
Storuman in Sweden.
mid-2016 Canada Fluorspar Inc. received approval from the St
Lawrence government to proceed with the development of its AGS
fluorspar mine project in Newfoundland, Canada, which will have
a nameplate capacity of 200,000 tpa.
markets for fluorspar remained weak throughout the year due to
the slowdown in global construction and a slump in
fluorochemicals demand. Congestion in the fluorine supply chain
pulled operating rates in China’s aluminium
fluoride (AIF3) sector down as low as 45%.
fluorspar producers reported frail financials throughout the
year. In February, Mexican producer Mexichem SA de CV said that
its profits had been negatively impacted by lower metspar
consumption rates and prices, but were partially moderated by
steady demand for acidspar and refrigerant gases.
greenhouse gas (GHG) emissions has become a priority for an
increasing number of countries, prompting regulatory changes
and a shift towards eco-friendly fluorochemical substitutes.
Major producers have said that this is unlikely to negatively
impact acidspar demand, however, as alternative chemicals are
still likely to be fluorspar-based.
profit margins led some Chinese producers to exit the spot
market altogether in 2016 and restrict sales to long-term
contracts. But the heavily discounted price environment means
that these companies are unlikely to secure strong margins on
fluorspar demand in the steel and cement sectors was
particularly pronounced at the start of 2016, with a slump in
Chinese steel production driving down prices from Mongolia and
forcing capacity closures.
China’s steel sector began to recover slightly in
the second quarter, the government’s policies of
capacity reduction and closing the most polluting steel mills
had a knock on effect on Chinese metspar demand.
is used as a flux in steelmaking and is also an important raw
material in cement and welding markets, meaning that wavering
construction activity this year has undermined consumption.
Cement and welding consume around 100,000 tpa metspar,
representing around 2% of global demand.
also faced competition from other fluxing materials in 2016,
cutting producer requirements to around one tonne of metspar
per thousand tonnes of steel. The emergence of alternative
fluxes, such as alumina-based blends, could see utilisation
rates fall further.
for both acidspar and metspar began the year at low levels, due
to a combination of oversupply and weak end market demand as a
result of the slowdown in global construction
acidspar prices dropped 4% in the first quarter of 2016, due to
the weaker Chinese renminbi, which led some producers to extend
lower export offers in the hope of securing business. This
downward pressure on prices was exacerbated by aggressive price
undercutting from the new generation of low-cost acidspar
suppliers emerging in Southeast Asia, mainly Vietnam and
low-priced offers amid stagnant demand took some grades to
their lowest price levels in four-and-a-half years during the
quarter, with soft consumption rates restricting any attempts
to raise selling values.
contrast, acidspar prices from Mexico remained mostly stable in
the first three months of this year, mainly because of limited
trading activity on the back of overcapacity in the
fluorochemicals sector and a lack of purchasing activity in
hydrofluoric acid (HF) and AlF3 markets. The second quarter of
2016 saw a slight uptick in fluorspar demand due to seasonal
buying in countries where hot summers spur demand for air
conditioning chemicals, mainly India and the Persian Gulf
failed to boost acidspar prices, however, as consumption rates
generally remained low across downstream markets and prices
fell continuously for the majority of grades throughout
FOB China prices did rise to around $280/tonne in the second
quarter due to heavy rain affecting supply and some renewed
demand, new supply from Southeast Asia and high inventories in
the fluorine supply chain stymied further upward
metspar prices continued to drop throughout the majority of the
year, falling by 19% in September as demand from traditional
steel and cement markets remained limited. Excess supply in
China also forced domestic sellers to offer low prices on
the end of 2016, metspar and fluorspar prices were holding
steady and an economic stimulus driven-rebound in Chinese
construction and infrastructure offered some hope of recovery
a rebound in fluorspar prices is unlikely unless global
economic conditions improve on current lacklustre growth rates,
or suppliers cut production and help to rebalance the
by producers to lift prices have so far proved unsuccessful,
with buyers rejecting higher offers amid increasingly
competitive supply and flat to weak demand.
consumers have noted that Italy-based fluorochemical producer
Fluorsid Spa’s buy-out of the Odda AlF3 operation
from Norwegian smelting company Boliden AB, confirmed in
October, could influence raw material consumption
downturn in the worldwide oil and gas sector in the last few
years has been more pronounced than expected and 2016 was
difficult for oilfield mineral suppliers. Rig counts for
onshore drilling, a major end market for silica (frac) sand,
barite (barytes), bentonite and proppant minerals, continued to
drop globally, particularly in North America, in the first half
of the year, although by the third quarter the pace of decline
in technology used by oil and gas exploration firms, as
companies drill more stages per well in order to cut costs,
have led to the price of oil becoming more detached from rig
count figures and a less concrete indicator of demand for
oilfield minerals, as more frac sand is being used per
2016, ten frac sand producers accounted for 65% of market
supply, but production utilisation in the year to November
remained at just 25-30% of capacity.
US-based Eagle Materials Inc. reported a 68% decline in frac
sand volumes and financial losses were reported by other
oilfield mineral players including Baker Hughes Inc.,
Halliburton, Carbo Ceramics Inc. and Fairmount Santrol
costs have become increasingly relevant to frac sand profit
margins, prompting some suppliers to integrate distribution
capacity. In February, US-based Twin Eagle Sand Logistics LLC
opened a new rail terminal in Texas to supply sand to regional
oil and gas drillers in response to higher demand. In August,
US Silica Holdings Inc. announced plans to purchase frac sand
logistics company, Sandbox Enterprises LLC.
barite producer Double Crown Resources Inc. announced in August
that it had been issued a patent for its interlocking,
intermodal commodity transport system, Translock. Double Crown
began supplying barite products to the oil drilling industry in
2015, but told IM that its barite business has been put on hold
owing to the decline in the oil and gas sector.
third quarter, some oilfield mineral companies decided to risk
restarting operations on signs of a market revival.
Ohio-headquartered sand producer Fairmount Santrol reopened its
Menomonie frac sand facility in Wisconsin and completed the
expansion of its Wedron silica mine in Illinois in order to
increase supply flexibility. Texas-based Hi-Crush Partners LLC
also reopened a frac sand facility in Wisconsin, after amending
customer contracts to give the firm higher demand
from the US, oilfield services company M-I SWACO was granted
approval in September by Perth and Kincross Council to develop
a barite mine in Duntalinch, UK.
Onshore oil and gas activity fell by 30% in 2015 and dropped a
further 20% in 2016, with the rig count hitting a low of 417 in
the middle of the year.
Hughes cut around 3,000 jobs in Q2, taking its total headcount
reduction to 26,000 in 18 months. However, a slight increase in
onshore oil and gas activity in the US and a seasonal uptick in
Canada did enable the company to reduce its loss by 44% from Q2
to Q3 and increase its North American revenues by
there was scant relief from revenue declines for suppliers of
more expensive proppants in the first nine months of the year,
a number of frac sand companies able to offer cheaper materials
to buyers saw volume improvements from the second to the third
November, US Silica reported Q3 frac sand sales of 1.6m tonnes,
flat year-on-year (y-o-y) and up 21% sequentially. The firm
suggested that the frac sand market had bottomed in the third
quarter and was in the early stages of recovery in
Europe, UK-listed Cuadrilla Resources Plc was allowed to
proceed with plans to frack a potential shale gas resource in
Lancashire, northern England, after a council ban was
overturned in October. Fellow UK operator IGas Energy Plc was
granted planning permission in November to develop a
hydrocarbon well site and drill two exploratory wells in north
also saw the Scottish government release a series of reports on
the economic, environmental and health impacts of fracking in
Scotland, ahead of a public consultation in January 2017, as it
decides whether or not to permit the practice.
frac sand prices remained down y-o-y in 2016, producers noted
quarter-on-quarter increases in the three months to the end of
September – a trend which is expected to continue into
early 2017 as capacity reductions have led to tighter
prices have been slower to respond to the slight rise in oil
and gas activity, although prices for some premium products
such as Northern White frac sand did sustain increases by
producers in the second half of the year.
early November, Donald Trump was elected president of the US.
Trump has expressed his avid support for the fossil fuels
sector and put forward plans to open onshore and offshore rig
leasing on federal land, eliminate moratoria on coal leasing
and open shale energy deposits, with the aim of becoming
independent of imported energy from "the OPEC cartel or any
nations hostile to [US] interests".
is despite experts pointing out that the decline in US drilling
activity has primarily been due to low global oil prices,
rather than a lack of political support.
to Trump’s election, in July, consultancy firm
Douglas-Westwood (DW) predicted that a turnaround in oil and
gas industry investment is unlikely to materialise before 2018,
as demand growth over the next year will probably be outpaced
by expansion in supply.
figures from the American Petroleum Institute (API) indicated
that the number of wells drilled and completed in Q3 2016
contracted by just 2.7%, compared to average quarterly declines
of 17.3% in the previous 18 months. The agency’s
statistics director, Hazem Arafa, said that this demonstrates
"that the consistent decline in oil and natural gas drilling
could be coming to an end".
oilfield mineral demand, high inventory levels need to be
worked through before market-moving restocking can take
past year was characterised by continued weakness in prices and
demand for most grades of graphite.
producers have complained of low margins and difficulty in
shifting volumes, although the graphite exploration sector
remains well populated, despite thinning investor
has been cited as the main drag on the graphite market, but
suppliers have stubbornly refused to give ground as many hang
on to see whether predicted growth in demand from the batteries
meantime, some producers are seeking to add value to their
graphite products in the hope that high-purity material will
find acceptance in a market swamped with standard
downtrend in demand for refractories, which remain the single
largest consumer application of graphite, has resulted in an
increasing surplus of the carbon mineral. Like other refractory
minerals, graphite has not yet felt the benefits of a slight
recovery in global steelmaking this year and new markets like
lithium-ion (Li-ion) batteries are not growing fast enough to
continues to be the world’s largest graphite
supplier and the country has given no indication that it is
willing to give up its dominant position. In September, China
National Nuclear Corp. announced the discovery of what could be
China’s largest graphite mine in Inner Mongolia,
estimated to contain around 316m tonnes of ore with average
carbon content of 5%.
October, repair work finally started at China Sciences Hengda
Graphite Co.’s graphite mine in Yichang, Hubei,
where broken pipelines led to the formation of hazardous sink
holes in the site’s tailings pond in January 2015.
The resulting suspension of mining activity at Hengda has
affected the region’s graphite trade, although the
supply was not missed by the market.
graphite industry did not escape a government clampdown on
pollution this year. Some companies responded to stiffer
regulations by swiftly making improvements, although primitive
mining and processing techniques still represent a significant
encumbrance to the sector’s
province, one of China’s three main
graphite-producing areas, is keen to ensure the local industry
expands and is ploughing state funds into new projects and
despite firm indications that Chinese graphite supply is set to
outweigh demand for the foreseeable future, exploration
companies in other parts of the world insist that conscientious
consumers are interested in securing non-Chinese material.
Several of these players aim to supply the Li-ion battery
sector, which is being driven by growth in electric vehicles
(EVs), mobile electronics and energy storage
order to beat the downturn in the market for standard grades of
graphite, existing and prospective producers are investing in
technology capable of yielding value-added graphite materials
such as micronised, battery-grade and expandable graphites. As
well as allowing producers to access higher value markets,
investing in high-tech processing gives companies the ability
to customise their products to meet the standards required for
state-owned South Graphite Co. Ltd, the world’s
largest supplier of amorphous graphite, announced plans in
October to expand output by 200,000 tonnes by the end of 2017.
The company intends to set up a new flotation purification
facility in Hunan province as it seeks to move away from rough
processing towards high-purity products.
Europe, France-headquartered Imerys SA reported that graphite
demand from Li-ion batteries had had a positive impact on its
graphite and carbon business in the first three quarters of
this year. The production status of Imerys’ Lac
des Iles flake graphite mine in Quebec remains unclear,
the overall trend in graphite demand was negative in 2016,
there was a partial pickup in enquiries for flake and spherical
grades in the second half of the year – marking a
slight improvement in Chinese exports of these products
compared to the same period in 2015.
August, Chinese natural flake export volumes rose 42%
month-on-month and were 1% higher year-on-year (y-o-y) for
graphite demand also demonstrated some momentum from October
onwards, with producers reporting more active purchasing
interest, although much of this was probably due to seasonal
buying ahead of winter mine closures in China.
spherical graphite exports for the first eight months of this
year reached their highest level since 2012, increasing 19%
y-o-y on higher demand from the battery sector. This positive
shift failed to lift prices, however, with buyers largely
dictating the market on the back of high
supply-heavy graphite market meant that producers were unable
to raise offer prices this year, despite higher costs for many,
including those Chinese suppliers affected by reduced limits on
domestic trucking loads.
demand for spherical graphite was more than offset by
oversupply, with prices for the material slipping by 6% y-o-y
flake graphite segment, prices for low-purity grades (85-87% C
and 90% C) of all mesh sizes dropped a couple of times
throughout the year, with long flat periods in between
similar trend was seen in 94-97% C grades, although the
downturn in prices was confined to Q2, after which values
for Chinese amorphous graphite were virtually flat for most of
end of 2016, there was no sign of oversupply in the graphite
market disappearing. Until overcapacity is addressed, graphite
prices will remain weak.
indications for standard graphite grades do not point to any
meaningful rebalancing of the market. For spherical grades, the
outlook is more promising, with strong projections for growth
in EVs and energy storage, which could make a meaningful dent
in supply and ultimately push prices up over the medium-to-long
market sources have suggested that low prices and ready
availability may entice new types of industrial consumers to
start using graphite, but at present there is little evidence
that the necessary R&D is underway to make this a
was a big year for lithium. Chinese spot prices for lithium
compounds began rising in late in 2015 and escalated throughout
the first half of this year, attracting the attention of
mainstream media and tempting several junior exploration
companies to enter the sector.
there have been many new entrants into the lithium exploration
industry, the market is currently dominated by a small handful
of suppliers – US-based Albemarle Corp. and FMC Corp.;
Chile’s Sociedad Quimica y Minera SA (SQM); and
the Chinese producers, Tianqi Lithium Industries Inc. and
Jianxi Ganfeng Lithium Co.
the market leaders have said they will expand their production
in the near term, in response to growing lithium
signed a memorandum of understanding (MoU) with the Chilean
government in February to increase its lithium carbonate
capacity in the Salar de Atacama in northern Chile, from 24,000
tpa to up to 70,000 tpa. A definitive agreement, which was
expected in Q1, had still not been reached by late November,
with Albemarle blaming Chilean government bureaucracy for the
which also operates out of the Salar de Atacama, tried to block
the ramp up on environmental grounds, but later backed down.
SQM has had its own internal problems to deal with this year,
as a long-running legal battle with state economic body
Corporacion de Fomento de la Produccion (CORFO) over rental
payments in the Atacama rumbled on. This year saw a number of
bidders express interest in buying the company, which observers
said may put an end to the dispute.
will begin construction at its Argentinian Cauchari Olaroz
project, a joint venture with Lithium Americas Corp., in H1
2017. This will be the company’s first foray
outside Chile and suggests that it wants to expand its options
in view of its acrimonious relationship with the Chilean
May, FMC announced it would triple its lithium hydroxide
capacity to 30,000 tpa by 2019, prompting some scepticism from
the market over its ability to source the requisite volumes of
lithium carbonate. These doubts were partly answered in
November, when FMC signed a deal with Canadian junior Nemaska
Lithium Inc. to buy 8,000 tpa lithium carbonate from
said in September it would build a 24,000 tpa lithium hydroxide
facility in Western Australia, to be fed by spodumene from
Talison Lithium Ltd’s operations at Greenbushes,
which it shares with Albemarle.
Orocobre Ltd continued to ramp up its Olaroz facility in
Argentina, despite numerous setbacks. In Q3, it achieved its
first full quarter of production with output of 3,013 tonnes
new spodumene producers – Reed Industrial Minerals Ltd
(a consortium of China’s Ganfeng and Australian
juniors Neometals Ltd and Mineral Resources Ltd) and ASX-listed
Galaxy Resources Ltd – were set to enter the market in
the final quarter of 2016, with shipments due to leave
Australia in November and December,
from Galaxy’s Mt Cattlin site is to be sold on the
open market in China, while Ganfeng will purchase all offtake
from Reed’s Mt Marion site.
and actual lithium demand escalation in 2016 led industry
players to speculate that the market may need an additional
20,000 tpa lithium carbonate equivalent (LCE) – the
equivalent of one new project every year – for the
which accounted for 35% of global lithium demand in 2015
according to the US Geological Survey (USGS), are expected to
drive higher consumption, with volumes demanded by electric
vehicles (EVs) and stationary energy storage manufacturing
anticipated to grow sharply.
uses for lithium, such as ceramics and glass (32% of
consumption) and lubricating greases (9%), still make up a
healthy demand balance, according to the USGS.
generous EV subsidy in China drove significant demand from late
2015 through H1 2016, with Chinese spot buyers paying high
premiums for prompt deliveries of both lithium carbonate and
hydroxide. The government reviewed the policy in the middle of
the year, clamping down on allegations of "subsidy cheating",
causing demand to drop off, which in turn hit spot
June 2016, Chinese spot prices for lithium carbonate and
hydroxide had quadrupled from a year earlier to peaks of almost
government’s EV subsidies led to six months of
inventory building by battery makers up to mid-2016, but the
subsequent tightening of the policy stalled buying and led
prices to deflate in H2. The trend was exacerbated by some
traders deciding to sell off stock because of fears that the
arrival of new lithium supply from Australia might cause prices
time of publication in late November, Chinese spot prices of
lithium carbonate and lithium hydroxide were stable at levels
of $18-21/kg and $20.5-24/kg, respectively.
rest of the world, annual contract prices for 2017 were being
negotiated in Q4. It is expected that contract values will rise
significantly from the ranges of $6-7/kg for lithium carbonate
and $8-9/kg for lithium hydroxide seen in 2015, but the spread
of prices is likely to be wide, with volumes, relationships and
end markets determining deals.
are bullish about increasing lithium demand in the coming
years. Increased use of EVs and lithium-ion (Li-ion)-powered
large scale energy storage systems are expected to drive
battery demand, which Deutche Bank has predicted will grow by a
factor of five over the next decade. The bank forecasts lithium
carbonate equivalent (LCE) demand to rise from 181,000 tpa in
2015 to 535,000 tpa by 2025.
magnesia (FM) and deadburned magnesia (DBM) demand and prices
continued to struggle in 2016 as a result of the downturn in
their main end market, steel refractories. The caustic calcined
magnesia (CCM) segment fared better, owing to its diversified
when the industry thought it might be near the bottom, in
November China quietly cancelled its magnesia export quotas,
which had been in effect since 1994, creating further
uncertainty in the market.
a weak but steady first quarter in the magnesia industry,
Chinese delegates at IM’s MagMin
2016 Conference in Dusseldorf in May told their international
colleagues that the challenges facing FM and DBM markets were
as acute in China as they appeared in the rest of the world.
CCM producers reported slightly stronger trading conditions,
meanwhile, and said that supply could even be
observers suggested that stricter environmental regulations in
China could limit magnesia production, however IM discovered
that Liaoning province, the biggest magnesia producing area in
the world is unlikely to cut output as it attempts to reverse
its declining GDP rate.
early November, China removed quotas on magnesia exports
following a World Trade Organization (WTO) ruling against its
quotas on fluorspar and rare earths.
market observers predict that Chinese magnesia will flood the
international market, while others believe the
country’s government will quickly bring in
alternative measures, such as production controls and corporate
consolidation, as it did with the rare earths
meantime, importers of Chinese magnesia have cancelled orders
and plan to wait until 2017 to see how prices move.
China, the largest magnesia companies are attempting to get
ahead of Chinese competitors by investing in high quality,
October, Austria’s RHI AG and
Brazil’s Magnesita Refratários SA merged to
form a global refractories giant. The combined entity will have
over 50 facilities globally, with footholds in Europe, the
Americas and Asia and direct control over raw
in February, Russian manufacturer Magnezit Group and the
Ministry of Industry, Energy and Trade of Russia’s
Krasnoyarsk Territory signed a cooperation agreement, which
will see Magnezit increase FM output in the region from 15,000
tpa to 50,000 tpa.
same month, Netherlands-based Nedmag Industries Mining and
Manufacturing BV announced a €122m ($129.6m*) investment
programme for 2016-2025, aimed at securing new magnesium salt
supply and delivering sustainable innovation.
market conditions weighed down Turkish magnesia suppliers in
2016. Speaking at MagMin in May, Dr Haris Yiannoulakis,
chemical engineer at Grecian Magnesite, said that Turkey has
the capacity to produce 100,000 tpa CCM, 570,000 tpa DBM and
40,000 tpa electro-fused magnesia (EFM), for a total of 710,000
tpa magnesia products. But in 2015, actual production was just
478,000 tonnes, representing 67% capacity
North America, US-based Martin Marietta Materials Inc. reported
slight declines in income for its speciality magnesia business
this year as US steel production wavered and in South America,
Magnesita swung back to a profit of $40.1m for the first nine
months of 2016 from a loss of $262.8m a year earlier, but this
was mainly due to accounting and currency effects, as
Brazil’s steel industry continues to
the challenging magnesia market has not deterred some
exploration companies from trying to enter the
March, Canada-based West High Yield Resources Ltd, raised
Canadian dollar (C$) 5m ($3.7m) to fund the final stages of
permitting at its 43m tonne Record Ridge FM project in southern
British Columbia and by the middle of the year had embarked
upon an environmental study and mine plan.
May, Australia-listed Jindalee Resources Ltd obtained the
Arthur River and Lyons River magnesite deposits in Tasmania,
now rechristened as the Prospect Ridge magnesite project. The
southern part of Arthur River has a resource estimate of 25m
tonnes but the rest of the project is yet to be quantified. The
company is currently compiling data on the deposit and has
applied for an exploration licence.
June, Thessally Resources Pty Ltd announced it was assessing
the viability of reviving mining operations at the Huandot
magnesite deposit in Australia’s Northern
Territory to supply CCM to speciality end markets.
Archer Exploration Ltd confirmed in November that material from
its 453m tonne magnesite project in South Australia is capable
of producing high grade DBM and CCM and planned to commence a
bulk processing trial in December.
Overcapacity in the magnesia refractories industry has muted
the positive effect of a slight recovery in steelmaking on DBM
and FM consumption in 2016. Demand for magnesia from the cement
and glass refractories sectors has rebounded slightly this year
with Chinese government stimulus measures boosting construction
and infrastructure investment, but oversupply has acted as a
drag on the market.
demand for CCM in niche sectors has delivered pockets of
growth, but not enough to raise overall magnesia
data show that Chinese magnesia prices fell during 2016. In
September, the average export price of FM was down 16%
year-on-year (y-o-y) to $469.80/tonne; the CCM price declined
10% y-o-y to $195.10/tonne; and DBM prices were 9% lower y-o-y
final quarter of the year, Chinese magnesia producers said that
higher production costs could push up selling prices but
doubted whether buyers would accept increases. Stalemate
ensued, with buyers postponing orders until 2017 in the hope
that the cancellation of Chinese export quotas will soften
merger between RHI and Magnesita has prompted predictions that
the magnesia industry will see further consolidation in the
coming years, particularly if the market remains tough for
outlook for steel and refractories is dimmed by the assumption
that China has no more stimulus left to inject into its economy
and rising steel demand in India will not be enough to offset
the Chinese slowdown.
remains over the impact the removal of Chinese magnesia export
quotas will have on the market.
and new western magnesia suppliers are likely to concentrate on
CCM and niche, high-value market applications rather than
traditional refractory uses.
conversions made November 2016