IM Prices April 2017

By IM Staff
Published: Monday, 03 April 2017

See article below, from the April issue of Industrial Minerals, for market updates on price movements in various industrial minerals. Minerals featured this month include: soda ash, TiO2, brown fused alumina, magnesia, antimony trioxide, fluorspar, white fused alumina, iodine, potash and rare earths.

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.

For more up to date pricing information please go to the IM Pricing Database.

Soda ash

Soda ash prices fall as Chinese output rises

Albert Li, Yoke Wong

China-origin soda ash spot prices fell in early March as production increased in the country, following months of reduced utilisation rates in 2016.  

Three Chinese suppliers told IM that production in China was rising and prices have dropped as a result of the increasing supply.   

Dense and light synthetic soda ash fell to $235-265/tonne on a FOB China basis, down $10/tonne week-on-week, according to IM’s assessment on 9 March. 

One of China’s biggest soda ash producers, the 3m tpa Shandong Haihua Group shut their soda ash production facility for nearly one month after a leaking accident at the end of January 2016, according to the company. Following repair work, Shangdong Haihua has since gradually resumed production.

Soda ash, synthetic, dense & light, FOB China 
Prices1  
Source: Industrial Minerals 

The Chinese suppliers warned that prices could continue to fall in the coming weeks if domestic supply and inventories continue to increase. 

According to China custom data, the soda ash export volume from China plunged to 87,066 tonnes in January, a drop of 41% compared with 147,052 tonnes in December 2016. 

However, some market participants were expecting Chinese exports to increase in March, 

as they were seeing more China-origin soda ash in the Asian market.  

"There was an increase in enquiries because of lesser exports from China, but that’s going down, some export volume is coming out of China," one Asia-based trader told IM.

TiO2

Titanium dioxide prices continue to trend upwards

Kasia Patel

Supply tightness, higher raw materials costs and increasing demand for the mineral as a result of higher end market activity were continuing to push up prices for titanium dioxide (TiO2) in March.

TiO2 prices in Europe and Asia rose in the week to 9 March, with more price increases expected in the US at the start of April.

Market sources told IM that the fire at Huntsman’s Pori plant in Finland in February has tightened supply in Europe, with spot trades being agreed at higher levels.

European prices were assessed at between €2,150-€2,575/tonne for bulk volumes TiO2 pigment, CIF Europe, up from €2,000-2,425/tonne in February.

Average prices in Europe were also expected to move upwards in the second quarter of the year according to market participants, with one European buyer predicting average rates of €2,400/tonne in Q2 2017.

Titanium dioxide pigment, bulk volume, CIF Northern Europe 
Prices2  
Source: Industrial Minerals 

Elsewhere in Asia prices also saw an uptick to $2,400-$2,700/tonne on a CFR basis for bulk volumes. According to one Chinese supplier, the average FOB price for TiO2 exported from China is likely to increase to $2,800/tonne.

Meanwhile in the US, prices have been slower to reflect the price hikes announced by major producers.

"The price movements have been slower to affect the US market because of the control of producers, but I expect a price increase of the quarter every quarter," one US buyer told IM, anticipating another price uptick on 1 April.

US prices was last assessed at between $2,400-$2,900/tonne on a CIF basis, unchanged since January 2017. 

While the fire at Pori has created tighter supply in the European market, industry participants have expressed concerns over a general lack of new supply in the sector, with lead times for new orders as long as three months.

In addition to tighter supply, TiO2 producers have noted higher demand for their products while end users have also emphasised that demand for paints and coatings has increased.

Further upstream, prices for feedstock material such as ilmenite and rutile have also seen an increase – a trend which is expected to continue.

PPG raises coatings prices

As a result of higher raw material costs, major US paints and coatings producer PPG plans to increase customer-specific prices and surcharges in Asia to offset higher costs.

The price increases will impact selected automotive OEM (original equipment manufacturer) coatings and industrial coatings products, effective 1 April or as contracts allow, the company said on 10 March.

"The coatings industry in Asia is currently experiencing a dramatic tightening of commodity supply, stemming from increased environmental regulations and controls, supplier capacity constraints, and regional availability of feedstocks," Tim Knavish, PPG senior vice president, automotive OEM coatings, said in a statement.

Brown fused alumina

Brown fused alumina spot prices climb in China

Yoke Wong

Brown fused alumina (BFA) prices moved higher in early March as anti-pollution controls continued to hamper production in China.

Production disruptions resulting from the ongoing environmental controls in China led BFA spot prices higher 9 March.

Local governments in Chinese provinces Henan and Shanxi imposed a new round of strict production stoppages in the first week of March impacting fused alumina and bauxite output (see pp15-16). This followed massive shutdowns seen last year and further compounds the already tight supply in China.

China is one of the biggest fused alumina supply globally and accounts for the majority of refractory minerals supply in the world.

The main BFA producing region, Henan Province, was placed under a severe pollution alert on 3-4 March with electricity used for industrial purposes being monitored by local authority to ensure emissions were capped.     

BFA production facilities that have met environmental standards have continued to operate while others have either stopped production or reduced output during this period, market participants told IM.   

As many plants were permanently shut by the first wave of anti-pollution crackdown in July 2016, the remaining producers are utilising full production capacity to meet existing demand, market sources said.   

"Plants started production but environmental problem is still there. Government forced factories to pay for environment licence and de-dusting facility. The top BFA production province is Henan and in Henan province, the biggest two BFA lump suppliers are in full production and pending orders are extremely tight," one European supplier told IM.  

"There are many small players working overtime due to no stock in any BFA plants. BFA grains and mm and abrasive sizes are in tight supply….I expect the shortage will stop by end of March, but the situation [could] last longer than expected," he added.

With demand exceeding supply, offers for material have increased over the past two weeks.  

Spot prices for Chinese-origin refractory grade BFA increased to $600-610/tonne on a FOB China basis, up from $580-610/tonne two weeks previously, according to IM’s assessment on 9 March.   

Trades in Europe have concluded as high as $650 on a FOB China basis, one supplier claimed but this price could not be verified.  

Some buyers were reportedly changing their purchasing strategies to cope with the supply tightness.

One refractory maker in Europe had delayed its usual Q2 procurement in order to wait-out the uptrend in China, in the hope that prices would fall when the anti-pollution drive end, according to the source. 

However, with Beijing prioritising air quality as part of their national agenda, the strict anti-pollution policy have remained in place and are expected to be enforced for the long-term.     

As a result, the refractory maker had to purchase smaller volumes at $605/tonne FOB China from European trader for delivery in early second-quarter, the source said.

"Now you will not find large volume, 200-500 tonnes maximum," the refractory maker added. "We will see impact from Q2."  

Several traders and suppliers told IM that they do not have excess BFA stock, while one producer said that he was sold-out.  

"[Customers] can’t get it [supply] from anyone else, because no one has any," a second Europe-based trader said.

Meanwhile, severe traffic congestion on the Yangtze River has delayed some BFA deliveries in early March.  

The impact of this temporary delay to prices is unclear as yet and one producer claimed that it will not impact the mainstream market as there are other supply sources.

Abrasive grade BFA spot prices meanwhile were unchanged 9 March having risen to $700-750/tonne in late February from $615-665 previously. 

Alumina, fused, brown, 95.5% min Al2O3, refractory sized, FOB China 
Prices3  
Source: Industrial Minerals 

Raw material shortage  

Restrictions on bauxite mining in China under the anti-pollution campaign has reduced raw material supply to produce BFA.   

"Another big factor pushing up BFA prices is the shortage of crushed good quality bauxite feed to BFA plants, it is very short [due to] environmental reasons too," the first supplier said.

Elsewhere in Shanxi, the local government has banned coal-fired energy generation in the province’s capital city Taiyuan as part of anti-pollution campaign, it announced on 1 March.   

Most refractories minerals’ production in China are traditionally powered by coal, but under China’s natural gas policy, industries are being compelled to operate on natural gas as it is a cleaner fuel compared with coal.   

Shanxi is the main bauxite mining region, followed by Guizhou.


Magnesia

Magnesia supply issues ahead in China, market says

Albert Li

Chinese magnesia market participants believe production stoppages and the resulting supply cut will impact domestic prices, although material continued to flow out of the country at lower values due to the lifting of the export quota in end-2016.

Though the value of magnesia exported from China in January plummeted, according to customs data, the situation in early March showed potential for a price increase according to market participants who pointed to possible domestic supply shortages going forward.

In the first week of March, one of the magnesia producing areas, Haicheng City, announced another round of environmental inspections, which is the second time in 2017.

As a result of these inspections, production lines at many small companies and some big companies were temporarily forced to stop, particularly for dead burned magnesia (DBM) and caustic calcined magnesia (CCM).

All grades of China-origin DBM remained unchanged for the past month with 92% MgO spot prices at $150-170/tonne on a FOB China basis, according to IM’s pricing assessment on 2 March.  

Calcined magnesia 90-92% MgO also held at $135-160/tonne FOB China.  
Magnesia, dead burned, 92% MgO, lump, FOB China
Prices4  
Source: Industrial Minerals 

A major producer in Haicheng was surprised at the impact to large companies because prior restrictions have only affected small businesses. This, the major producer added, could be a signal that this time "things are getting serious".

The production stoppages will definitely affect the magnesia supply in Haicheng which in turn could support prices, according to market participants.

In addition, the annual National People’s Congress and People’s Political Consultative Conference, which was held in early March, had a knock on effect to national production as magnesite producers could not buy dynamite in the market during the period, which led to a temporary halt in magnesite mining.

Furthermore, Haicheng government also began to change requirements on the magnesite mine stripping ratio. In the past, low grade magnesite was always deserted and only the high grade was kept, this caused an unbalanced stripping ratio and a huge resource waste. Apparently, the government now plans to stop this waste after years of huge piles of tailings.

Almost all magnesia output is produced in Liaoning province, in which there are two major producing areas; Haicheng and Dashiqiao. Haicheng focuses on source material production while Dashiqiao does further processing. Producers in Dashiqiao expressed fears to IM that the environmental protection measure in Haicheng will spread to Dashiqiao sooner or later.

One producer in Dashiqiao said domestic prices were raised twice this year and expects export prices to follow suit accordingly.


Antimony

Global antimony trioxide spot prices spike again

Yoke Wong

Amid concerns that more smelters will be shut down in China, global antimony prices spiked by as much as $400/tonne week-on-week by mid-March.

China accounts for 80% of global antimony supply and the intensifying clamp down on polluting smelters has cut production in recent months.

Shutdowns have particularly impacted the supply of antimony ingot – the raw material used to produce flame retardant mineral antimony trioxide. Although trioxide producers were not hit by the clamp down, their production has been squeezed by tight raw material supply.  

Antimony trioxide (typically 99.5% Sb2O3) spot prices increased to $7,800-7,900/tonne on a FOB China basis, up $400/tonne compared to early March, according to IM’s assessment on 14 March.

Antimony trioxide, typically 99.5% Sb2O3, 20 tonne lots FOB China 
Prices5  
Source: Industrial Minerals 

In one producing region Guangxi, several smelters in the province were shut and inspections have already began in Hunan.  

"The production stoppage in Guangxi has already happened - those who can resume production have done so, but those who didn’t, will have no opportunity to do so," one China-based trader told IM.

Due to the supply disruption in China, some European producers are seeing increasing enquiries.

"Customers we haven’t seen for years are coming to us, they are not getting their supply from China," one European producer said.

In Europe, prices also jumped to $7,900-8,000/tonne CIF Antwerp/Rotterdam, while prices in the US spot prices rose to $8,000-8,300/tonne CIF East Coast, both locations registered $400/tonne gain week-on-week. 

Antimony trioxide prices have been rising steadily since end-January but the intensifying anti-pollution clamp down and the resulting supply cuts have further boosted gains in the mineral.

Many are expecting prices to remain firm in the short-term despite unchanged levels of demand from the flame retardant sector as Chinese supply could not be easily replaced, market participants said.

Fluorspar

Chinese fluorspar prices rise on steel turnaround, supply constraints

Albert Li

Fluorspar prices rose post the Spring Festival in China at the end of February as a stronger domestic steel industry boosted metspar grades and supply constraints lent support to the acidspar market.

Chinese fluorspar prices increased for the first time since October 2016 as markets picked up after Chinese New Year, also known as the Spring Festival holiday.

Metspar grades rose by about $10/tonne in end-February, according to IM’s assessment on 23 February.

IM’s metspar min 80% CaF2 [bulk, FOB China] price increased to $210-230/tonne on 23 February from $200-220/tonne previously, while metspar min 85% CaF2 rose to $250-270/tonne from $240-260/tonne and metspar min 90% CaF2 moved up to $290-310/tonne from $280-300/tonne. 

Metspar, min 85% CaF2, FOB China 
Prices6  
Source: Industrial Minerals 

Contacts in the south and north of China told IM that the rise was due to Chinese steel companies turning a profit and higher steel prices.

Various grades of steel have hit multi-year highs since the end of the Festival while results from steel producers show their balance sheets moving into profit in 2016 from losses in 2015.

Acidspar prices have also increased, rising by $20/tonne in China on the back of multiple factors such stronger performance of downstream industries like aluminium fluoride and hydro fluorine as well as tight supply due to cold weather conditions and production shutdowns during the Spring Festival holiday and stricter environmental protection policies.

The annual National People’s Congress and People’s Political Consultative Conference in early March was also impacting national production activities to some extent with the restricted use of dynamite reducing mining in some areas, according to contacts.

Market participants contacted by IM believe metspar and acidspar prices will continue to be supported in the short term.

WFA

White fused alumina prices rise on higher costs, supply tightness

Yoke Wong

Higher shipping and production costs combined with supply constraints from China have pushed white fused alumina spot prices upwards in Europe in end-February.

White fused alumina (WFA) spot prices jumped in Europe in February due to higher freight rates and production costs, while the ongoing environmental restrictions continued to cap Chinese output.

China is one of the largest fused alumina producers in the world but anti-pollution related production shutdowns in the country since July 2016 have reduced supply. 

Many WFA plants that did not meet environmental standards were shut down in 2016 and may not re-open due to the governments’ perceived commitment to uphold its new tougher stance, according to market sources.

Furthermore Chinese WFA producers who have met environment standards are said to selling increased volumes in the domestic market to meet local demand, leaving less material available for export.    

Within the country, refractory-grade WFA (min 99%) was consistently trading at around Renminbi (Rmb) 5,000 ($727)/tonne on ex-works basis, which was equivalent to $800-830/tonne on a FOB China basis, one trader and two Chinese producers told IM.  

At these levels many Chinese producers were not incentivised enough to export without a price premium on top of the domestic market.  

"There is no point to export to Europe at [Rmb 5,000]," one producer told IM.

Although production in Europe was not impacted, supply has not been sufficient to meet existing demand that was previously also covered by China, one Europe-based supplier said.

"[European producers] have very, very small volume for spot," the Europe-based supplier said. "People are desperate for WFA product."

Following the uptrend in China, European producers have also raised their WFA offers in Europe. Two refractories producers have received higher offers from suppliers in mid-February, they told IM.  

Refractory-grade WFA (99.0% Al2O3 min, in 25kg bags) spot prices were assessed at €720-820/tonne on a CIF Europe basis, up €45/tonne compared with €700-750/tonne in the previous fortnight, according to IM’s assessment on 23 February.  

Firm alumina price, higher freight rate

Raw material alumina prices in China have also remained firm at a range of Rmb 2,880-3,000 ($419-436.50)/tonne on a delivered China basis, according to IM’s sister publication Metal Bulletin on 23 February. 

Although the alumina prices have fallen slightly by Rmb 10/tonne week-on-week, prices are still up 68% compared to Rmb 1750 at the same time in 2016.

Alumina is the key raw material used to produce WFA.  

Freight rates from China to Europe in March has also increased by $250/20’ full container load (fcl), pushing shipping costs to more than $1,100/fcl, one trader and a shipping source told IM

Fused alumina, white, 25kg bags, CIF Europe 
Prices7  
Source: Industrial Minerals 


Iodine

ACF lays off mine staff as low iodine price pinches

Myles McCormick

Chilean iodine producer ACF Minera SA reportedly made the entire mining staff at its Lagunas operation in northern Chile redundant in early March, as low iodine prices continue to pressure producers.

The miner, owned by Chile’s De Urruticoechea family, let go a hundred employees and a further hundred contractors at Lagunas, effectively shutting the mining operation. But it will keep the secondary processing part of the facility operational.

"At these low price levels, these guys cannot afford such a mine," a source familiar with the situation told IM.

The Lagunas operation had been nearing the end of its life for some time, though higher prices at the beginning of the current decade had allowed ACF to extend the mine’s life.

The same source suggested any production deficit caused by the ACF mine shutdown may be replaced by increased supply from Algorta Norte SA, another iodine producer also controlled by the De Urruticoecheas.

"I would not be surprised if Algorta’s production increased," he said, though he added that limited water access would limit any such capacity ramp up.

ACF and Algorta Norte combined are the second largest iodine producer in Chile, with total joint output ranking between Sociedad Quimica y Minera SA (SQM), the largest, and Cosayach, in third place.

Iodine market

Iodine prices have dropped sharply over the past number of years, falling from heights seen in the wake of the 2011 Tohoku tsunami in Japan and then being driven downward by fierce competition for market share between Chilean producers.

Iodine crystal, 99.5% min, drums, spot 
Prices8
Source: Industrial Minerals

A number of major producers have continuously attempted to undercut each other in a bid to expand their share of the market and, it has been suggested, to drive higher cost players out of production.

SQM has previously indicated it is targeting one third of market share. In 2016 it controlled 29%.

Cosayach, which had previously been competing with SQM for market share recently decided to reduce output from 350 tpm to 250 tpm. It is unclear to what extent this will impact the amount of material available on the market, however, as this will depend on how much inventory the company still has.

The price of iodine (crystal, 99.5% min, drums) held at $19.5-21/kg on a contract basis and $18.5-21/kg on a spot basis, unchanged since end-January, according to IM’s assessment on 9 March. Iodine prices have been falling steadily over the years since hitting the highs of $90/kg in 2012. 

Prices have remained static for the past three months, and there is some indication that prices may have bottomed out, with market participants indicating this week that quotes from some lower-price Japanese suppliers had risen by around $0.50/kg from levels seen three months ago (though these remains within the current range).

One producer noted: "It seems prices are reaching the bottom (…) the downward trend has stopped, I think."

ACF Minera could not be reached for comment by IM. Independent Iodine, the company’s Belgium-based distributor, declined to comment when contacted.

 Pricing notice: Proposal to delist calcium carbonate grades
 Industrial Minerals is proposing to delist a number of calcium carbonate grades from the IM Pricing Database.

Industrial Minerals proposes to delist the following calcium carbonate grades, effective 12 April 2017:

• Calcium carbonate, GCC, 1.1-0.7 microns (untreated), FOB USA, $/s.ton

• Calcium carbonate, GCC, 22-10 microns, FOB USA, $/s.ton

• Calcium carbonate, GCC, 3 microns (untreated), FOB USA, $/s.ton

• Calcium carbonate, GCC, 50-22 microns, FOB USA, $/s.ton

• Calcium carbonate, GCC, coated, chalk, ex-works UK, £/tonne

• Calcium carbonate, GCC, coated, fine grade, ex-works UK, £/tonne

• Calcium carbonate, GCC, stearate coated 1.1-0.7 microns, FOB USA, $/s.ton

• Calcium carbonate, PCC, coated, ex works UK, £/tonne

• Calcium carbonate, PCC, Fine, surface treated (0.4-1 microns), FOB USA, $/s.ton

• Calcium carbonate, PCC, uncoated, ex works UK, £/tonne

If you have any comments please contact Industrial Minerals’ Head of Market Reporting Yoke Wong at yoke.wong@indmin.com


Potash

Canpotex secures higher potash spot prices in April

Yoke Wong

Canada-based Canpotex believes a sale of spot potash tonnage to Brazil for April delivery at a higher price signifies that the fertiliser market is improving.

Marketing joint venture (JV) Canpotex has concluded potash spot business to Brazil for shipment in April at a new higher price, the company said on 16 March. 

"Canpotex recently concluded pricing for a sale to Brazil for shipment in April at a new higher level of $258/tonne CFR, reflecting continued improvement in the market over the past several months," said the JV. 

Canpotex did not reveal the volume of the business but this deal is $13 or 5% higher than the $245/tonne agreed for the 50,000 tonnes potash contract on CFR Brazil basis, which was finalised in January.   

Brazil is one of the top fertiliser consumers in the world and demand in the country is expected to remain strong in 2017. 

Canpotex is a JV between fertiliser producer Potash Corp. of Saskatchewan Inc (PotashCorp), Canadian producer Agrium Inc and North American producer The Mosaic Co.

Rare Earths


China Northern Rare Earth Hi-Tech raises March prices

Albert Li

China Northern Rare Earth Hi-Tech Group has raised the March prices of praseodymium and neodymium oxide by Chinese renminbi (Rmb) 4,000/tonne, but lanthanum and cerium oxide prices are unchanged. The company bumped up the prices of praseodymium/neodymium metal and neodymium metal by Rmb 4,600-5,000/tonne respectively as well.

The price increases for March are much smaller than the equivalent increases announced in February.

Reasons for the price increases include the continued drive for supplier-side reform in the rare earth industry, initiatives to combat illegal mining and business activities, stricter and more frequent environmental inspections, and stocking up after the Chinese New Year festival. 

However, IM   has yet to see or hear of any obvious improvement in downstream demand.

China Northern Rare Earth Hi-Tech raises prices 
Prices9  
Unit: RMB/tonne, ex-works, VAT included 

Rare earths mining quota

In other news China’s government has kept rare earths and tungsten production quotas unchanged in 2017, however 100% of the quota has been allocated to the biggest six mining companies in the country, according to the first round of controls announced on 16 March.

China’s Ministry of Industry and Information Technology (MIIT) has set a quota of 52,500 tonnes for rare earths and 45,650 tonnes for tungsten from Chinese mines, in its first round of 2017 controls.

The rare earths quota consists of 8,950 tonnes of ion-type (middle and heavy) rare earths and 43,550 tonnes of light rare earths. The quota for the second phase will be announced in H2 as usual.

The 2017 quota levels are the same as in 2016, 2015 and 2014, and the quota’s provincial distribution is also the same as last year.

However, last year, although most of the quota was allocated to the biggest six mining groups, other companies were included; this year 100% of the quota has been given to the six biggest firms.

The quota system has been in place since 2006.

The ministry also announced that every provincial government would be required to pass on the quota allocation news promptly to municipal and town governments and rare earth companies. Each local bureau of land and resources must sign responsibility agreements with mining companies, and require them to report appropriate data and accept inspections any time.

Illegal mine discovery

Meanwhile, in Guangxi’s Rongxian County, the authorities have discovered and closed down an illegal rare earth mining operation at a site near Jinku Village, in a remote mountainous location.

A group of criminals had constructed a platform using waste earth, built several ponds on the platform and covered them with plastic film, to make it look as if the site was being used for growing plants.

The hillside suffered damage to vegetation, plus water and soil loss. 

According to local authorities, five large settling ponds, one large generator, 10 pumps, three sheds and several pipes, faucets and conveyor belts were destroyed in three hours. In total, 30 suspects were apprehended.