Fluorspar: A year in review

By Siobhan Lismore-Scott
Published: Thursday, 28 December 2017

2017 was epitomized by the shift away from Chinese produce dominating the market, as federally-imposed environmental regulations squeezed output; Canada, Vietnam, Thailand and South Africa all moved in on China's market share.

There was a shaky start to the year for the fluorspar markets as prices remained low on lackluster demand and an oversupplied market.

Things were so bad that one developer, Tertiary Minerals, admitted that it was looking to other markets to make profit, because of poor global market conditions in fluorspar and difficulties with the development of its Swedish fluorspar project.

By March the situation was very much changed, however. Fluorspar prices within China had started to rise as downstream industries such as steel, aluminium fluoride and hydrofluoric acid started to perform better when the steel industry recovered.

Despite this uptrend for China-origin fluorspar, prices elsewhere in the world remained largely stable as consumers were well covered by long-term contracts. Amid improving demand and the supply cuts in China intended to reduce pollution levels, however, some were optimistic of a recovery following six years of depressed demand and falling prices.

Anti-dumping and legal issues

The United States Department of Commerce imposed an anti-dumping duty on a number of refrigerant materials imported from China with effect from March 1, 2017.

After launching an investigation in October 2016, the department determined in April that a series of fluorochemical compounds commonly known as R-134a was being, or was likely to be, sold in the US at "less than fair value."

Anti-dumping duties ranging from 148.79% to 167.02% were imposed on China-origin R-134a imports into the US.

"This is something that we have been lobbying about for some time. It has been several years; now, it finally looks like it is going to hold," one US-based consumer told Industrial Minerals.

In August this year, the US Court of Appeals for the District of Columbia circuit overturned a ruling by the country’s Environmental Protection Agency (EPA) in 2015 that would have banned a series of fluorochemicals (R404a, R134a, R407C, R410A) from use in new products, to begin from January 2021.

The EPA ruled under the US’s Clean Air Act that a list of high global warming potential (GWP) fluorochemicals were classed as unacceptable and would need to be replaced with alternative low-GWP chemicals.

As a result of the EPA ruling, many companies including Chemours and Honeywell researched and developed technologies to produce hydrofluoro-olefin (HFO) to replace hydrofluorocarbon (HFC) products.

Chemours and Honeywell said that they intended to challenge the ruling.

Production cuts bite

As well as a recovery in demand from the steel sector, Chinese prices were also climbing on curtailed supply, as the environmental legislation took hold. This was seen in the process for both fluorspar and in aluminium trifluoride (AlF3) in April.

AlF3 is used as a flux for aluminium metal production, and many producers worldwide source the raw material from China. But production in key producing regions in Southern China was severely reduced due to anti-pollution inspections, which led to the closure of plants that did not meet environmental standards.

In April, acidspar spot prices increased in Europe after months of stability, when producers started to raise their offers following the uptrend in China. Some argued, however, that the spot market was not representative because it accounted for a small proportion of the overall business volume, which is largely covered by annual contracts.

New supply

This year saw a new project come online. Canada Fluorspar opened its 200,000 tonnes per year St Lawrence mine, in the province of Newfoundland, in October. It is an open-pit mine with 30 years’ operation capacity and potential for 40 years of resource development.

Afghanistan fluorspar producer Amania Mining is expected to start commercial production of acid-grade material (acidspar) in early 2018.

The company was established in 2010 and has been producing metallurgical-grade fluorspar (metspar) since 2014. The new acidspar production schedule was later than the initially planned timeframe.

South African fluorspar producer SepFluor, meanwhile, expects to achieve full production in 2019.

Industrial Minerals Fluorspar 2017 Conference

  • Producers of fluorspar and hydrogen fluoride (HF) face challenges related to declining ore quality, Thomas Dahlke of BUSS ChemTech told delegates at the 2017 conference, held in Amsterdam in October.
  • High-quality ore reserves are being exhausted while newer resources are smaller in size and are often located in politically unstable regions, Dahlke said.

Guillermo Federico Gallegos, commercial director at Mexichem, identified a number of trends:

  • The scarcity of metspar material.
  • Looking at consumption patterns, global metspar volumes have reduced by 19% since their peak in 2013; the estimated volume for 2016 is around 2.3 million tonnes, and the prediction for 2018-22 is growth of around 3% per year.
  • Metspar is no longer only about the product.
  • Metspar usage in steel is becoming more focused on speciality and/or stainless steel products, so customers increasingly require more stringent metspar characteristics, such as high quality and minimum batch-to-batch variability of product.
  • Customer’ logistics are also evolving, especially in Europe and the US, where they want to ensure the sustainability of their raw materials and are ordering smaller amounts more frequently, rather than bulk shipments.
  • Any other applications for metspar will require strong technical expertise.
  • New applications for metspar, such as using as a flux with the cement raw materials in the rotary kiln in order to speed up the calcination process, may not be as swift as some might hope.
  • Chinese aluminium fluoride production is set to fall by 6% in 2017 after shutdowns and the consequences of regulatory tightening, Cassie Yan, manager of Do-Fluoride Chemicals (DFD), said. Yan expects Chinese output to fall to 670,000 tonnes this year from 710,000 tonnes in 2016.
  • Fluorspar producers in Canada, Vietnam and South Africa are ramping up output at the time when Chinese supply has been curtailed as a result of environmental legislation.
  • Although China remains a major global supplier of fluorspar, with a downstream focus that will continue to rationalize supply, Vietnam’s proportion of total Southeast Asia supply volumes increased from 0% in 2012 to 77% in 2016; while the remaining 23% largely came from Thailand, according to Masan Resources.

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