New production of fluorspar from Canada Fluorspar, which has
been beset by delays, might come to the market around the same
time as South Africa’s Sepfluor makes its first
shipments. This has led some market participants to wonder what
effect this new supply will have on the currently high
Fluorspar supply is tight at the moment because of reduced
output from China, which has propelled acidspar prices to
multi-year highs so far in 2018.
Many participants are waiting to see if the new supplies
from Canada Fluorspar and Sepfluor, each of which will adding
200,000 tonnes per year of capacity to the market, will push
Several buyers and suppliers believe that current prices,
particularly out of China at more than $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 about when,
or if, the idled operations in China will come back on stream,
the expected production from Canada Fluorspar and Sepfluor
could create the next pinch point for the market’s
|Market participants are waiting to see if new
supplies will push prices down.
The first shipments from Canada Fluorspar, which is based in
Newfoundland, were due in the final months of 2017 but the
company has still not made any sizeable deliveries of material,
Industrial Minerals understands.
Canada Fluorspar did not make any comment on this at the
time of publication.
Meanwhile, Sepfluor is the next large-volume project that
has a firm date for when it will come on stream. The first
shipments will be made by the end of January 2019, chief
executive officer Robert Wagner recently reiterated to
Sepfluor will serve a wide range of users via shipments of
5,000-8,000 tonnes until June next year, allowing consumers to
gauge the consistency and quality of the material and to decide
whether it can be accepted in their own production systems,
according to Wagner. He does not believe that this extra supply
will affect prices.
"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" and believed that prices will not stay at such
highs after Sepfluor enters the market. A "new equilibrium" of
$350 per tonne will be achieved, he predicted.
But Sepfluor is not the only source in the African region
from which new sources of supply are expected. SA Fluorite and
Kazakhstan’s Eurasian Resources Group are leading
investors in the 180,000-tpy Doornhoek project in South
Africa’s Guateng Province, although this is still
three-five years away from coming online.
The team working on the project has played down the
importance of where prices will be at that time.
"We hope to break even at around $200 per tonne, so the
price is less significant - the quality is the more important
aspect," consulting geologist Allan Saad told Industrial
The Doornhoek fluorspar will be well placed to compete with
its local competitors - Sepfluor and the well-established
Vergenoeg mine, the latter of which is owned by Spanish mining
group Minersa - because of the expected lack of impurities,
"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 Gujarat Fluorochemicals (GFL) has
recently brought a 40,000-tpy mine in Morocco which is already
"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 added.
And the Kenyan Ministry of Mining has been reported to have
found a new investor recently for the 120,000-tpy mine in the
Kerio Valley, formerly operated by Kenya Fluorspar. If this is
correct, it may plan to return the mine to production, although
Industrial Minerals could not verify this with the ministry at
the time of publication.
China, Canada variables
The fluorspar market should remain tight despite the
additional supply that the two soon-to-commission South African
producers will provide, they believe.
"Certainly, Sepfluor will relieve some pressure [in the
market] but China is the biggest issue. The time when Canada
Fluorspar comes online is also an important factor," Wagner
The market in China will remain tight until summer 2019 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
country’s government, although Industrial Minerals
has received unconfirmed reports that the sector is operating
at 45-50% of capacity.
The use of environmental controls intensified throughout
2017, leading to a jump in prices in 2018 contract
negotiations. The price of 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
expected effects of China’s environmental
controls, claiming that Chinese sellers are merely pushing for
higher prices. Still, it is unlikely that prices will remain at
the current 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
Saad agreed, saying that China will "probably" become a net
importer at some stage. 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
change its mind.
While acknowledging the current market tightness, market
participants do not believe that the market requires an
additional 400,000-500,000 tpy of capacity at present.
A European consumer has forecast that the market will
"immediately go long" once the new capacity comes to the
market, estimating the amount of oversupply to be just a "few
thousand tonnes" at present.
One producer believes that prices should move down by
"$50-100 per tonne, depending on location."
And 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
|Primary aluminium production globally is forecast to
grow by 4.1% in 2018.
The longer-term market fundamentals support the presence of
additional supply, according to Sepfluor’s Wagner,
who forecast that the market will be undersupplied by
600,000-800,000 tpy by 2025.
"There will be room for two, three or four [new] mines in
the coming years," he 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 volume at 6.5 million tpy, this
would equate to 7.18 million tpy by 2023.
Canada Fluorspar, Sepfluor and the Kenyan mine can account
for 520,000 tpy at full capacity, thus leaving room for a
fourth new 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 tpy, or 33% of the world’s supply. Any
long-term decreases in volume would weigh heavily on global
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-demand
balance, and therefore of prices.
Rising demand for aluminium fluoride
Estimates of primary aluminium production show that global
output will grow by 4.1% in 2018. This in turn will require
greater volumes of fluorspar-derived product, such as aluminium
Key growth markets include those in North America, which
will grow by 7%, producing an additional 70,000 tonnes of
primary aluminium, and Asia (excluding China), which will grow
by 7.6% to add another 102,000 tonnes, according to forecasts
from Metal Bulletin Research.
China alone will add 280,000 tonnes of the metal, equating
to 3% growth. All growth combined will see the global total
rise to 16.7 million tonnes from 16.04 million tonnes in
United States President Donald Trump put trade tariffs on US
aluminium imports in order to boost domestic production, under
the country’s Section 232 trade laws. The industry
responded to this swiftly and it has been reflected in output
In the US-production space, Century Aluminium and Magnitude
7 Metals have both restarted pot lines.
Century restarted three potlines, which will revive 150,000
tonnes per year of previously idled production at its plant in
Hawesville, Kentucky, while Magnitude will restart two of three
idled potlines at its 263,000-tpy plant in New Madrid County,
Magnitude is considering "the restart of a third and final
pot line of primary production capacity, if and when market
conditions allow," chief executive officer Robert Prusak has
told Metal Bulletin.
These restarts were made public within two days of each
other, on March 12 and 13 – five days after the
Section 232 tariffs were announced.
In terms of draw on raw materials, the new smelters require
13-14kg of AlF3 per tonne of primary aluminium, whereas the
older smelters need 25-28kg of AlF3 per tonne of output.
And every tonne of AlF3 produced requires 1.9-2.0 tonnes of
The additional US aluminium production volumes in 2018 could
require another 11,000 tonnes of fluorspar, with global
aluminium volumes requiring 110,000 tonnes of fluorspar.