European fluorspar consumers report tightness, spot prices could move up

By Michael Greenfield, Michael Greenfield
Published: Friday, 11 January 2019

Market tightness in Europe has not been alleviated. according to three local hydrofluoric (HF) acid producers, which could mean consumers are forced to pay higher spot prices.

Spot market prices above $550 per tonne in Europe could be possible, consumers have told Fastmarkets, because of supply tightness in the European acidspar market continuing into 2019.

Due to the limited availability of fluorspar, spot material could be sold at a premium, despite three separate sources reporting they have enough fluorspar for their own operations.

Fastmarkets IM first reported on the tightness in the European market in July 2018, which was primarily a result of environmental controls negatively affecting Chinese production.

In November last year, European consumers reported holding depleted stock levels as a result of withering supply in 2018.

Fastmarkets IM was informed about a small-volume contract priced above $550 per tonne on a cif Rotterdam basis during its latest price assessment window.

In fact, the seller said the price was "closer to $600 per tonne."

This was not reflected in Fastmarkets IM latest assessment, however, because it was not clear if this was truly representative of the current market price due to the small volume, which was reported to be below 2,000 tonnes per month.

Therefore, Fastmarkets IM's assessment of the price for acidspar, 97% CaF2, wet filtercake, cif Rotterdam is at $550-580 per tonne, as assessed on January 10, unchanged week on week.

"In the current market context, it is reasonable that some fluorspar consumers may have had to resort to some spot operations and pay a premium over yearly contracts, which have been signed close to and above $500 per tonne," one European HF acid producer said.

"Spot sales at $550 per tonne, cif Rotterdam doesn’t sound too crazy given that we have seen contracted shipments coming from Asia into Germany at $530 per tonne in August," the source added.

The market remains tight for contracted shipments. As a result, the spot market price is high, a second HF producer said via email.

"I would say most of the German HF producers have secured supplies of fluorspar and are probably not counting on volumes from either Canada Fluorspar or Sepfluor," the first HF producer said.

Sepfluor is not offering material until the second half of 2019, according to messages seen by Fastmarkets IM.

This could be because material will be shipped to customers that have already signed contracts or, as previously suggested by Sepfluor, that the company will focus on sending trial shipments for the first half of the year. 

Canada Fluorspar’s material has already been successfully put through ione HF producers' systems but Sepfluor’s material is yet to be qualified, the second HF producer told Fastmarkets IM via email.

Canada Fluorspar and South Africa-based Sepfluor are both currently bringing new mines to the market, each with around 200,000 tonnes per year of capacity.

"Regarding future outlook, I would say that market participants are very focused on one main topic: when the new projects will bring sufficient tonnage into the market and reverse the current price trend," the first HF producer said.

"I would not expect prices to go down before Canada Fluorspar and Sepfluor both prove full production capacities, which is unlikely to happen before the second half of the year," according to a third HF producer.

"Some relief [to the supply and demand balance] might come from China after the Lunar New Year as we hear the HF demand there is currently not very strong," the third HF producer added.

China cools
Chinese market participants reported that domestic prices had softened by 50-150 yuan ($7-22) per tonne, leaving the domestic range at around 3,200-3,500 yuan per tonne.

The price of HF is falling because weaker demand for refrigerants during the winter season has failed to support a continued price increase in fluorspar.

Domestic prices had been reported as high as 4,000 yuan in November and December 2018, Fastmarkets IM learned.

This softening is yet to be reflected in Fastmarkets IM assessed price for acidspar, 97% CaF2, wet filtercake, fob China, which remains at $550-580 per tonne on January 10 for the seventh consecutive week.