As 2018 contract negotiations get into full swing, buyers
and sellers of acidspar l in Europe have urged caution.
After several years of low contract prices, 2018 looks
likely to see acidspar contract values move up with the first
deals being settled in Europe at prices well above $300 per
"There is an important inversion of the trend taking place,"
a buyer told Industrial Minerals, before adding that all offers
he had received to date were well above $300 per tonne.
A reduction in global output, particularly from China
recently, has combined with a rise in demand from
fluorspar’s downstream markets and has led to the
increase in prices, buyers and sellers agreed.
While many had expected an increase after negotiations began
at the Industrial Minerals Fluorspar conference in Amsterdam
at the end of October, some have been surprised at the level
of increases while more deals near completion.
"It’s a definite sharp increase from where we
are this year. I did expect it, but not to this extent," a
second buyer said, adding that one Chinese supplier had told
him he would not have anything available until mid-2018.
But sellers looking to compensate for years of declines
should exercise caution before driving prices too high or
selling too much product to particular regions, the first buyer
and a producer told Industrial Minerals.
Global fluorspar production has been in decline for several
years and this, combined with unexpected production cuts from
China in 2017, has led to a much tighter supply scenario.
While the output reduction of fluorspar and its downstream
products such as hydrofluoric acid (HF) and aluminium fluoride
(AlF3) in China has led to higher demand
domestically, producers and consumers outside of China have
cautioned against committing too much material to the
HF and AlF3 prices have increased in recent
months, but margins will be eroded by increasing fluorspar
prices, the buyer added.
How long the anti-pollution-related production cuts will
last in China is the key determining factor for the future,
buyers and sellers agreed.
Output is unlikely to increase between now and the Chinese
New Year in February 2018, according to the majority of market
participants polled by Industrial Minerals.
Production traditionally dips in the run-up to the national
holiday because weather conditions worsen and workers take time
off, a trader in China pointed out.
"While the long winter lasts, fluorspar production may stop
in mid or late January, before the Spring Festival in February,
because usually factories will be closed for holidays and
workers will travel back to their home towns in advance -
sometimes one month ahead of the festival. Therefore,
production may stop for more than a month in China, [and] then
demand will surely outstrip supply," the trader in Southern
Expectations of what will happen after the public holiday
divided the market, however, with some suggesting that prices
will go down from February onward and others believing that
prices will remain above $300 now that the "psychological
barrier has been broken".