The andalusite prices have risen once again for contracts
signed for 2019 supply, but market participants see tightness
easing and expect fundamentals to progress towards
Prices from all main origins have been contracted at a few
percentage points above last year’s bulk of
contract prices, as strong demand from the refractories sector
continues to drive consumption.
This is the second consecutive year prices have
Fastmarkets IM assessed the 2019 contract prices
for andalusite, mininum 57% Al2O3, at €270-340 per
tonne ($307-387) per tonne) fob South Africa on February 21.
This compares with €260-320 per tonne for 2018
As for the delivered Europe market, Fastmarkets IM assessed
the 2019 contracts for andalusite,
minimum 57% Al2O3, at €340-450 per tonne cif Europe,
on February 21, compared with €390-430 per tonne cif
Europe for 2018 contracts.
Andalusite prices can vary significantly depending on the
volumes contracted, with large-volume buyers (taking anywhere
between 4,000-6,000 tonnes per year) normally commanding prices
that can be meaningfully lower than those achieved by buyers of
smaller tonnages (1,000 tonnes or less).
For both price assessments, the low end of the range tends
to represent larger-volume buyers, while the top end represents
Fastmarkets has a minimum tonnage of 1,000 tonnes for these
price assessments, with no maximum.
As regards the cif Europe prices specifically, while the
previous range - which for 2018 was €390-430 per tonne cif
Europe - was mostly representative of mid- and small-sized
volume trading, the current range has been expanded at both
ends to additionally capture large volumes, with a view to
better represent the bulk of international andalusite
Prices tick upwards, improved output
The majority of market participants contacted by Fastmarkets
agreed the market has appreciated by 4-5% at the low end up to
8-9% on the high end, this year, depending on specific trades
and previous prices.
This has been confirmed by Fastmarkets IM’s fob
South Africa price assessment, which marks an average 5.2%
increase on previous levels.
The latest top end of the cif Europe range, at €450 per
tonne, has appreciated by 5% on last year.
According to some sources, in a number of cases prices have
risen by 15-20%, depending on previous levels. And while
assessments have not shown such a hike, it is possible some
specific contracts may have moved upwards by that amount and
remained within the wider assessed range.
Supply conditions improved across the board during 2018,
after a severe shortage seen in 2017. That year - owing to weather-related problems
cutting output in both South Africa and Peru - the global
market ended up short of material. Some estimates put the
deficit at up to 30,000 tonnes, sources told Fastmarkets
IM at the time.
No such issues were seen last year, which instead generated
"close to record" production output across the main origins,
sources told Fastmarkets IM.
According a pool of more than 10 market participants, global
production in 2018 between South Africa, France and Peru is
estimated at 300,000-310,000 tonnes. This volume (especially
the low end) excludes any additional output from China, which
is reputed to produce 10,000-15,000 tonnes, according to the
most conservative estimates.
Chinese production is normally aimed at serving the domestic
market only, however, with the country relying on imported
material to fill any demand gaps.
On the demand side, the tightness apparent in the market in
2017 eased somewhat last year - although not fully, due to some
2018 volumes being booked to cover outstanding 2017
"Everyone oversold in 2017, and hardly anyone could meet the
orders," a market participant said, "so those outstanding
volumes were covered with last year’s
This overlap has gone some way to redressing the market
imbalance, although prices did pick up again on strong demand
from the refractories sector. And because andalusite is often
sourced as alternative to Chinese bauxite, the ongoing supply
issues with that material have contributed to maintaining the
Despite the price upticks this year, market participants are
cautiously optimistic about the supply demand balance.
"The market could stabilize between supply and demand this
year if no production issues occur," one source said, largely
echoing comments from others.
Fastmarkets IM is proposing to change the frequency of
its andalusite price assessments from yearly to quarterly, to
capture any mid-year movements in the market. A separate
pricing notice will be published detailing the