IM Prices May 2017

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.

Lithium

Business as usual in the global lithium market

Martim Facada

The lithium market remained stable in end-March with participants reporting "very good levels" of activity in the China spot market amid slightly quieter trading in the US and Europe.

The booming battery sector in China continued to support domestic spot trading there, with sales of 20-40 tonnes lots reported at $18-21/kg for lithium carbonate (min. 99-99.5% Li₂CO₃, CIF China) and $20.5-24/kg for lithium hydroxide (56.5-57.5% LiOH, CIF China).

"We have been having a very good rate of material inquiries over the course of the past days for both industrial and battery grades of lithium carbonate and hydroxide, however, anticipate the battery sector demand to grow stronger within the following weeks [in April]", a supplier told IM.

In the US and European markets, traders and consumers remained highly pegged to their long-term contracts under which the majority of the material keeps being absorbed.

Contract prices for lithium carbonate (min. 99-99.5% Li₂CO₃, large contracts, del. US) remained between $10-16/kg while spot market sales in the regions – despite minimal activity – trading at up to $18/kg for lots of 20 and 40 tonnes.

Lithium carbonate, min 99-99.5% Li2CO3, large biannual contracts, del continental US, $/kg

Source: Industrial Minerals

"Our current contract with a major lithium supplier is now subjected to the movement of the market; if the market prices move up due to the current strong demand our suppliers will be able to revise and increase their prices by mid-2017", a European consumer explained to IM.

Lithium hydroxide prices in Europe and US remained stable in March with prices for 56.5-57.5% LiOH, delivered in Europe or US between $14-20/kg with spot market prices in Europe and US reportedly going as high as $23/kg for lots of 20 tonnes.

"We see an excessive demand in the market, which has enabled us and other suppliers to hedge our prices in the spot market, however, the majority of our material remained traded under a contract basis. If we had more material we would fulfill all enquiries but unfortunately demand has increased at a higher speed than the global available production", a lithium producer told IM.

Despite strong demand, the US and European markets were anticipated to remain at these levels due to the amount of material committed to contracts in 2017.

More trading activity was anticipated in China, however due to the more liquid spot market there. This will rely deeply on strong demand persisting, though.

Graphite

Chinese amorphous graphite prices fall

Albert Li

Chinese export prices of amorphous graphite decreased in mid-April while flake graphite grades remained unchanged, according to the IM assessment taken on 13 April.

Standard amorphous graphite grades 78% C and 80% C (-100 mesh or -200 mesh) saw their price level decline by $10-20/tonne week-on-week, on an FOB China basis.

This brought amorphous graphite 78% C down from $270-290/tonne to $250-280/tonne FOB China, and 80% C material from $320-350/tonne to $300-350/tonne FOB China, respectively.

Amorphous, 80% C, -200 Mesh, FOB, China

Source: Industrial Minerals

For rare amorphous graphite, such as 85% C, -100 mesh, the export price dropped 7% or $60/tonne from $700-1,000/tonne to $680-900/tonne. 

According to a major producer in Hunan province, after the export tax was cancelled in January, prices did not decline by a straightforward 20% (the full value of the duty), as was first expected.

In many grades, the decrease ranged between 10-15%, leaving some room for further potential drops.

Meanwhile some raw materials, such as coal, had increased, affecting production costs and thus preventing amorphous prices from showing a steeper decline.

Flake graphite prices have remained flat since January, at the following price levels:

Source: Industrial Minerals

According to flake producers in Shandong province speaking to IM, downstream industries such as refractories continue to show reduced demand.

Stricter environmental standards may affect the production of high purity graphite and expandable graphite due to the use of acid in processing, but this is not a major production in China.

Chromite

Chemical chromite edges down as foundry holds

Davide Ghilotti

Chemical grade chromite prices declined between $10-20/tonne in early April, while strong demand held up prices of foundry and refractory grade material.

Chemical chromite prices edged downwards following weeks of a standoff between suppliers and Chinese buyers, while foundry grade material remained firm amid healthy demand.

Spot prices for chemical grade chromite have held steady since the beginning of the year, following a rapid increase to five year-highs at the end of last year.

According to IM’s assessment on 11 April, prices have dwindled on the back of slow buying activity and reduced trading of metallurgical UG2 chrome ore into China.

IM tracked chemical chromite, 46% Cr₂O₃, wet bulk, at a range of $410-430/tonne FOB South Africa, marking a decrease against a range of $430-440/tonne FOB in the first quarter.

Commenting on the latest price developments, a South African supplier told IM that "unrealistic expectations" were behind the previous higher range.

Another supplier added: "The market sentiment is [that prices are] going down a bit. UG2 is also up in the air, which is directly affecting offers for chemical grade."

Chemical chromite, unlike foundry grade, was closely linked to the trends shaping metallurgical grades. There tends to be a $40/tonne premium on chemical grade chromite over UG2.

Contracting for new business meanwhile remained slow, both suppliers and buyers told IM in early April.

Chinese users have been relying on previously-bought material, while they held off from buying until the beginning of second quarter.

Inventories of chrome products held at Chinese ports were estimated at 1.5m tonnes, according to IM sources. The level was higher than at this time last year, when low levels of stocks at ports ignited what became a buying frenzy which pushed prices upwards from H2.

At the same time, suppliers cautioned about actual availa-
bility of material, noting that
a share of that inventory would be already booked or awaiting shipment to final customers. Additionally, the recent issues in river transport caused a backlog of cargo at ports. These volumes would also be included in the current inventory but, under normal conditions, would be already dispatched.

"Not all of that material is freely available for sale," a supplier said. "That figure is fictitious."

Chromite, chemical, 46% Cr2O3, wet bulk, FOB South Africa, $/tonne

Source: Industrial Minerals

Foundry holding firm

Foundry grade chromite sand was showing an overall healthier situation, characterised by firm prices and strong demand, in China and elsewhere, sources told IM.

Foundry grade chromite, 46% 3, wet bulk, remained priced at $410-450/tonne FOB South Africa while lower-purity foundry material, 45.8% Cr₂O₃, wet bulk, held at $400-440/tonne FOB South Africa, both unchanged since 22 December 2016.  

One trader said that, while it took longer for foundry prices to follow the uptrend of metallurgical and chemical chromite, 
it was showing more resilience overall compared with the metallurgical and chemical grades, both of which were falling in early April.

ALUMINA

Fluorspar

China supply disruption fails to lift fluorspar prices elsewhere

Yoke Wong

Fluorspar prices were largely stable outside China in early April amid supply disruptions in the world’s largest producing country as most consumers remained well-covered by their long-term contracts.

China, which accounts for about 50% of global fluorspar supply, has been facing supply disruptions since late February as Beijing imposed strict anti-pollution control on mining activities. The supply tightness was further compounded by lower seasonal output levels due to traditional winter production cuts.

Amid reduced output, demand for refrigerant and hydrofluoric acid have been improving, which has lifted China-origin acidspar prices, while the recovering steel industry has also boosted the value of metallurgical grade fluorspar (metspar).

The fluorochemical industry is the biggest end-user of acidspar, which is used to manufacture hydrofluoric acid – a key raw material in refrigerants, fluorocarbons and fluoropolymers. While metspar is used as a metal smelting feedstock for steel-making, hence steel production is a key driver of metspar demand.  

China-origin metspar and acidspar spot prices have been increasing since late February and both hit multi-year highs following years of depressed demand and falling values.

Acidspar min. 97% CAF₂, wet filtercake prices at $320-340/tonne on a FOB China basis were at three-year highs, according to IM’s 6 April assessment.

Although prices were unchanged since end-March, the market has not traded at these levels since February 2014.    

Metspar min. 85% CAF₂ prices, though also unchanged for weeks at $290-310/tonne on a FOB China basis on 6 April, are at a three-and-a-half-year high, or the highest since May 2013.   

"Six years in a row of falling prices, depressed demand, we might finally be turning a corner," a US-based consumer told IM.

However, elsewhere in Europe and the US, prices remained unchanged as consumers were well-covered by their long-term contracts, which would ensure supply for either one-year or six-months.

Although China accounts for more than half of global supply, other producers have been able to replace the reduced export volume from China. Many producers were also willing to sell at lower prices in order to compete for market shares, which has pressured prices outside China.

In addition, many consumers have diversified their supply portfolio, so many are not entirely dependent on Chinese material, thereby reducing their exposure to the recent supply disruption and price increases.  

US market

In the US, acidspar 97% CaF₂, dry filtercake prices were at $260-270/tonne on a CIF US Gulf port, according to the IM assessment taken on 6 April, with the market relatively unchanged since July 2016.

The annual and half-year contracts for delivery in 2017 were concluded late last year, when the market was depressed and prices hovered around five-year low, market sources said.  

However, with refrigerant demand in the US improving and final decisions on an anti-dumping case on China-origin refrigerants, a series of fluorochemical compound commonly known as R134a, some consumers in the US expect a further recovery in refrigerant demand.

The US department of Commerce announced 5 April that it is imposing anti-dumping duties of 148.79% - 167.02% on China-origin R-134a imports to the US effective from 1 March 2017.

If downstream demand continues to improve, consumers could potentially seek more acidspar to meet consumption needs in the second-half of the year.  

"We are reassessing our own production, if demand is continuing, there is a possibility that we would need to buy more. I would expect our competitors are also feeling the same effect on the same market," one US-based consumer said.

Europe

In Europe, the acidspar markets were also stable since end-July 2016 as the region was largely covered by long-term contract, which concluded end of last year.

"Due to prices being negotiated end-2016, there was a lot of pressure on the prices. We had to reduce our price. In 2016, the market was so oversupplied, there was hardly any sign that there was higher demand," one European producer told IM.

Acidspar min.97% CaF2 prices held at $250-270/tonne on a CIF Rotterdam basis 6 April, unchanged since July 2016, while min.85% CaF2 metspar, prices were at $240-260/tonne CIF Rotterdam, unchanged since March 2016.

Meanwhile major steel producing country Turkey continued to receive competitively priced metspar material from Afghanistan, Iran and China, which has capped prices in the region.

"We recently lost out a couple of tenders to the Chinese. They are far cheaper than what we can supply," one producer told IM.

Due to the intense competition in the region, some remained cautious about the demand outlook in Europe, but one major producer remained optimistic saying "this is the year that Europe will recover."  

Asia ex-China

Spot prices for acidspar, min 97% CaF₂, dry filtercake increased to $ 250-300/tonne on a FOB China to India basis 6 April, up $20/tonne compared to the previous week.

One buyer who sourced spot material from China told IM: "After the Chinese [new year] holiday, the prices have increased dramatically, we haven’t seen this kind of trend before."  

However, some Indian consumers remained well-covered on long-term contracts from suppliers outside China, which has limited price gains in the market.    

In Japan, one consumer has also reported higher refrigerant prices on the back of the fluorspar price uptrend in China.

Acidspar, 97% CaF2, Wet Filtercake, FOB China, $/tonne

Source: Industrial Minerals

Magnesia

Fused magnesia prices increase in China

Albert Li, Davide Ghilotti

Intermittent production issues are starting to have an effect on Chinese export prices for fused magnesia in April, while caustic calcined (CCM) and dead-burned magnesia (DBM) are holding for the moment. Meanwhile demand for European material is on the rise, according to market participants.

Fused magnesia (FM) export prices out of China rose 11 April, following steady increases in domestic prices.

Several producers in Haicheng, as well as European buyers, confirmed to IM an increase in FM prices ranging between $30 and $100 per tonne, depending on grade and destination.

China’s domestic FM prices have been on the rise this year to date due to a number of reasons, including the ongoing environmental inspections of local production processes, limited use of dynamite for mining activities, lack of magnesite ores out of Haicheng and government’s requirement on higher stripping ratio, among others.

FM domestic prices increased over 20% to-date this year, according to IM sources.

Magnesia, fused, 98% MgO, lump, FOB China, $/tonne

Source: Industrial Minerals

While producers believed that tight supply might continue until H2, they also believed that prices will keep growing, both for domestic sale and exports.

One producer in Haicheng told IM that environmental-related equipment upgrade costs may be higher than the cost of building a new kiln.

Specifically in FM, which requires first grade or special high-grade magnesite ores, the small amount of output and inventory may push FM prices further upwards.

One Dalian-based trading company told IM that, since magnesite resources are concentrated in Liaoning province, the provincial government can easily manage it through policies limiting output or adding mandatory sale price thresholds.

CCM and DBM prices remained stable for the moment, against the increase seen in FM, as shown in the table below:

Prices listed are $/tonne basis FOB China

Source: Industrial Minerals

Higher demand in Europe

Meanwhile in Europe, customers and local suppliers alike were keeping a close eye on the developments taking place in China.

Multiple sources based in Europe, active in production and trading, told IM that they have seen growing demand for European-produced material in some grades, including CCM and FM.

This, they claimed, was based on buyers not being able to secure enough volumes in China to cover their needs, forcing them to source elsewhere.

"Since production is intermittent, Chinese companies are meeting orders through existing stocks. This means that not all grades are readily available: FM seems thin on the ground at the moment," one European trader told IM.

While European magnesia prices have remained unchanged as of late, demand has reportedly increased. At least two suppliers told IM that the number of orders have grown this year to date compared with 2016.

"Business activity is growing," one supplier said.

The trader added: "The European market will get tighter. It’s just a matter of time."

KAOLIN

Antimony Trioxide

Chinese antimony trioxide offer prices rise as production woes continue

Martim Facada

Offers for China-origin antimony trioxide have increased amid lower production rates in early April but depressed demand kept spot prices unchanged 11 April.

Chinese producers have raised their trioxide 99.5% Sb₂O₃ FOB China offer prices up to $8,100/tonne FOB China for lots of 20 tonnes as less material was reaching the market due to environmental control constraints.

Still, a lack of confirmed sales at the $8,100/tonne FOB China levels kept the Chinese trioxide 99.5% Sb₂O₃ FOB China market unchanged between $7,900-8,000/tonne FOB China, according to an IM assessment, made 11 April.

A Chinese trader explained to IM that "the environmental inspection team has moved into Hunan and a lot of blast furnaces are shut".

"Some state-owned smelters are still running, but the production volume has been reduced and is not enough", the trader added.

In Europe the market remained sluggish with antimony trioxide 99.5% Sb₂O₃ prices continuing to trade between $7,900-8,000/tonne CIF Antwerp/Rotterdam over April.

Lower spot market activity and depressed demand in Europe have led prices to stabilise after months of rapid acceleration. European production remained lower, however, lending support to the prices.

"The market remains strong despite lower demand over the course of the past days. The Euro-Dollar exchange rate alongside the Chinese higher offers have kept prices at a strong level but unchanged; not being enough to reach prices above $8,000/tonne CIF Antwerp/Rotterdam, as consumers lack appetite," a European trader told IM.

In contrast, the US market prices remained above the other regions with higher values at $8,000-8,200/tonne CIF East Coast [antimony trioxide 99.5% Sb₂O₃]. 

"The market has seen no price improvement over the past days. We have been offered lots of
20 tonnes of Chinese material
at $8,100/tonne FOB China however we can still find cheaper material sourced from within the
US market", a US consumer said to IM.

While the global trioxide 99.5% Sb₂O₃ market held unchanged for the past month, sentiment remains bullish among market participants canvassed by IM with many anticipating prices to improve further as soon as demand picks up.

Antimony trioxide, typically 99.5% Sb2O3, 20 tonne lots FOB China, $/tonne

Source: Industrial Minerals

Rare Earths

China Northern Rare Earth Hi-Tech raises April prices

Albert Li

After a price hike in March, China Northern Rare Earth Hi-Tech Group again raised the prices of praseodymium and neodymium oxide by Chinese renminbi (Rmb) 7,000/tonne ($1,017/tonne*), at the beginning of April, while lanthanum and cerium oxide prices remain unchanged. 

The major Chinese rare earth producer also increased the prices of neodymium metal and praseodymium/neodymium metal by Rmb8,000 and Rmb9,000/tonne respectively.

Both lanthanum and cerium oxide prices remained stable for the past three months while other prices were raised four consecutive times since December 2016. Compared with December 2016, prices of lanthanum, cerium, praseodymium neodymium and neodymium oxide have increased by 1.59%, 1.71%, 10.15%, and 9.4% respectively. 

To stimulate the sales of lanthanum and cerium, the company explained that the price was still negotiable as it wanted to secure more long term lanthanum/cerium sales.

Previous reasons given by China Northern Rare Earth Hi-Tech for the price hikes were the lower production rates in China due to the continued drive for supplier-side reform in the industry; government initiatives to combat illegal mining and business activities; as well as stricter and more frequent environmental inspections.

China Northern Rare Earth Hi-Tech prices

Unit = RMB/tonne, ex-works, VAT included

White fused alumina

White fused alumina prices fall

Yoke Wong

Falling raw material costs pulled white fused alumina prices lower in early April, but the supply outlook remained uncertain in China.

Spot refractory-grade white fused alumina (WFA) prices fell in early April as production cost eased in China due to falling raw material value.

Alumina is a key raw material for WFA production and price have been falling on a weekly basis in the past month amid thin trade.

Free market metallurgical grade alumina in China decreased to Chinese renminbi (Rmb) 2,450-2,530 on a delivered, duty-paid basis, 6 April, according to IM’s sister publication Metal Bulletin.   

Alumina prices in early April dropped 17% or Rmb430 compared to prices on 2 March, according to Metal Bulletin data.

While WFA spot prices followed alumina’s downward trend, the decrease was limited by the ongoing anti-pollution related output disruptions in China.   

Spot refractory-grade WFA (99.0% Al₂O₃ min, in 25kg bags) prices were assessed at €700-750/tonne on a CIF Europe basis on 6 April, down €45/tonne or 6% compared with €720-820/tonne in March.    

"The drops in alumina prices were too small to impact WFA prices," one Chinese producer told IM.  

China is one of the largest fused alumina producers in the world but strict environmental policies have led to wide-scale production shutdowns in the country since July 2016.

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

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

Reduced Chinese WFA exports have led to increased enquiries in Europe, as consumes who normally depend on Chinese material seek other supply sources. 

Nonetheless, China is still a significant supplier in Europe, one Europe-based producer said.

However, if the supply disruption worsens in China due to Beijing’s tougher environmental stance, it could potentially cause severe supply shortage.

"China is the world number one producer in WFA, if they don’t want to supply, nobody could cope," said the Europe-based producer.

At the same time, European producers could be incentivised to ramp up production capacity to meet demand if WFA prices increase.

Fused alumina, white, 25kg bags, CIF Europe, €/tonne

Source: Industrial Minerals