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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
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
|Soda ash, synthetic, dense & light, FOB
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
"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
Titanium dioxide prices continue to trend
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
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
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
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
Brown fused alumina (BFA) prices moved higher in early March
as anti-pollution controls continued to hamper production in
Production disruptions resulting from the ongoing
environmental controls in China led BFA spot prices higher 9
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 is one of the biggest fused alumina supply globally
and accounts for the majority of refractory minerals supply in
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
"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
Trades in Europe have concluded as high as $650 on a FOB
China basis, one supplier claimed but this price could not be
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
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
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
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
|Alumina, fused, brown, 95.5% min Al2O3,
refractory sized, FOB China
Raw material shortage
Restrictions on bauxite mining in China under the
anti-pollution campaign has reduced raw material supply to
"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
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
Magnesia supply issues ahead in China, market
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
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
|Magnesia, dead burned, 92% MgO, lump, FOB
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
Global antimony trioxide spot prices spike
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
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
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
Chinese fluorspar prices rise on steel turnaround,
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
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
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
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
White fused alumina prices rise on higher costs,
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
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
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
"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
ACF lays off mine staff as low iodine price
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
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
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 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,
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
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
• 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,
• Calcium carbonate, PCC, uncoated,
ex works UK, £/tonne
If you have any comments please contact
Industrial Minerals’ Head of Market
Reporting Yoke Wong at
Canpotex secures higher potash spot prices in
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
Canpotex is a JV between fertiliser producer Potash Corp. of
Saskatchewan Inc (PotashCorp), Canadian producer Agrium Inc and
North American producer The Mosaic Co.
China Northern Rare Earth Hi-Tech raises March
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
|Unit: RMB/tonne, ex-works, VAT
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
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
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
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
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.