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.