Fluorspar production from Canada
Fluorspar, which has beset by delays, might come to the market
around that same time that South Africa's Sepfluor makes its
first shipments, leading some in the market to debate the
impact this new supply will have on currently high
Fluorspar supply is tight due to reduced output from China,
propelling acidspar prices to multi-year highs this year.
Many participants are waiting to see if the new supply from
Canada Fluorspar and Sepfluor - each of which is adding 200,000
tonnes per year of capacity to the market - will push prices
Several buyers and suppliers believe that current prices,
particularly out of China, at above $500 per tonne for some
grades are unsustainable.
Industrial Minerals' price assessment for
acidspar, 97% CaF2, wet filtercake, fob, China was $450-530
per tonne on July 12.
With demand currently strong and little clarity as to when, or
if, shuttered Chinese operations will come back on stream, the
forthcoming production from Canada Fluorspar and Sepfluor could
be the next pinch point for the market’s
The first shipments from Canada Fluorspar, based in
Newfoundland in Canada, were due in the final months of 2017
but the company has yet to make any major deliveries of the
material, Industrial Minerals understands.
Canada Fluorspar did not comment when contacted by Industrial
Meanwhile, Sepfluor is the next large-volume project that has a
firm date for coming on stream - first shipments will come by the end of
January 2019, chief executive officer Robert Wagner
recently reiterated to Industrial Minerals.
Sepfluor will serve a wide range of users via shipments of
5,000-8,000 tonnes until June, allowing consumers to gauge the
consistency and quality of the material and whether it can be
accepted in respective production systems, according to Wagner,
who does not believe that this extra supply will affect
"I don’t think [Sepfluor coming online] is going
to change pricing much, - a lot of product will disappear in
trial shipments and will not relieve the shortfall of supply in
the market," he told Industrial Minerals.
Wagner described a price of $500 per tonne for acidspar as
"unsustainable", believing that prices will not hold at those
highs after Sepfluor's entrance to the market. A "new
equilibrium" of $350 per tonne will be achieved, he
Sepfluor is not the only forthcoming supply source in the
region - SA Fluorite and Kazakhstan's Eurasian Resources Group
are leading investors in the 180,000 tpy Doornhoek project in
South Africa’s Guateng Province, which is still
three-five years from coming online.
The team working on the project has played down the importance
of where prices will be at that point.
"We hope to break even at around $200 per tonne so the price is
less significant - the quality is the most important aspect,"
consulting geologist Allan Saad told Industrial Minerals.
The Doornhoek fluorspar will be well placed to compete with its
local competitors, Sepfluor and the well-established Vergenoeg
mine, which is owned by Spanish mining group Minersa, because
of the expected lack of impurities, Saad believes.
"We will supply as much as the market can take," Saad said,
emphasizing the company's plan to focus on quality and
stability of supply.
The company will initially bring 120,000-150,000 tpy to the
market and then ramp up to full capacity, he added.
Elsewhere, India-based Gujurat Fluorochemicals (GFL) has
recently brought a 40,000 tpy mine online in Morocco.
"It all depends on the market and where the price is but we
would be looking to sell in Europe," GFL executive president BC
Jain told Industrial Minerals. The all-acidspar output could
also be consumed internally by GFL, he said.
The Kenyan Ministry of Mining has reportedly found a new
investor in recent weeks for the 120,000 tpy mine in Kerio
Valley, formally operated by Kenya Fluorspar Co. If so, it may
plan to return the mine to production although Industrial
Minerals could not verify this with the ministry by the time of
China and Canada variables
The fluorspar market should stay tight despite the additional
supply the two soon-to-commission South African producers will
provide, they believe.
"Certainly, Sepfluor will relieve some pressure but China is
the biggest issue and when Canada Fluorspar comes online is
also an important question," Wagner said.
The market will remain tight until next summer in China due to
the environmental controls in place there, Wagner
It is unclear exactly how much Chinese fluorspar production has
been affected by anti-pollution controls enforced by the
government although Industrial Minerals has received unconfirmed
reports that the sector is operating at 45-50% of
The environmental controls intensified throughout 2017, leading
to a jump in 2018 contract negotiations. Prices have also risen
- Chinese acidspar, fob China climbed to $450-550 per tonne in
April this year from $400-420 per tonne in January.
Some market participants have disputed the extent of the impact of China's
environmental controls, claiming that Chinese sellers are
merely pushing for higher prices. Still, it is unlikely that
prices will remain at elevated levels after new non-China
origin volumes come to the market.
"The situation is extreme and the market has found a new normal
where China will be in a different position. We believe that by
early 2019 China will reach a supply-and-demand equilibrium and
then move to become a net importer," Wagner added.
China will "probably" become a net importer at some stage, Saad
also estimates. With China’s supply to the market
falling, the timing depends on whether Chinese producers can
develop new resources, he said, cautioning that the controls
could "change overnight" should the Chinese government choose
to do so.
While acknowledging the current market tightness, market
participants do not believe the market requires an additional
400,000-500,000 tpy of capacity at present.
A European consumer forecast the market will "immediately go
long" once the new capacity comes to the market, pegging
oversupply at just a "few thousand tonnes" at present.
A HF producer that believes the prices should move down by
"$50-100 per tonne, dependent on location."
Still, since Canada Fluorspar is close to large-volume
consumers in North America, a single consumer could comfortably
absorb most of its output, one seller suggested.
Most of the additional capacity will go to the hydrofluoric
acid market, one fluorspar producer claimed - this sector
comprises high-volume consumers that may then look to use extra
supply to "bring the market into balance" by driving prices
The longer-term market fundamentals support more supply,
according to Sepfluor's Wagner who forecast the market to be
undersupplied by 600,000-800,000 tonnes by 2025.
"There will be room for two, three or four mines in the coming
years," Wagner said.
This is broadly in line with Saad’s prediction
that the market will grow by 2% each year for the next five
years. With the current market size at 6.5 million tonnes, this
would equate to 7.18 million tonnes by 2023.
Canada Fluorspar, Sepfluor and the Kenyan mine can account for
520,000 tpy at full capacity, leaving room for a fourth mine if
those growth predictions are correct.
All this remains highly dependent on whether or not Chinese
output recovers. Production in China accounts for around 2.15
million tonnes or 33% of the world’s supply; any
long-term decreases in volume would weigh heavy on world
supply, putting upward pressure on prices.
Unless there is a significant shift in demand, this makes the
long-term effects of the Chinese environmental controls the
major driver of the market’s supply-and-balance
and therefore of prices.