Selected price reporting for Oct-Nov

By IM Staff
Published: Friday, 01 November 2019

Fastmarkets' full price listing is only published online. If you have any comments or concerns, or wish to discuss any of the grades or prices listed, please contact Davide Ghilotti, Industrial Minerals editor davide.ghilotti@fastmarkets.com

Refractory-grade bauxite, fused alumina supply shortage continues

Sybil Pan

Mine closures and reduced operations for environmental reasons have been a constant feature for the first eight months of 2019 in Shanxi, one of the major producing areas for refractory-grade bauxite in China. 

These regulations will be even stricter this year given the winter heating season coincides with the 70th anniversary of the founding of the People’s Republic of China. Moreover, 2019-2020 is a key stage for China’s "Blue Sky Protection Campaign" launched in July 2018, a three-year plan to curb environmental pollution and improve air quality in China.

China recently launched the latest round of winter production cuts between October 1, 2019, and March 31, 2020, under the framework of the campaign. It will apply to 28 main cities and provinces, aiming to reduce emissions during the winter when pollution tends to increase due to more coal being burned to heat homes and enterprises.


Refractory-grade bauxite in Shanxi and Guizhou

In Shanxi province, environmental restrictions have been threatening supplies of refractory-grade bauxite since the beginning of 2019.

"Major bauxite mines in Shanxi province have been shut down," a source in Xiaoyi city, Shanxi province, told Fastamarkets. "For calcined alumina, the factory is undergoing staggered production with an average of two thirds of annual output affected."

A second source in China said operations can continue only if fuel used for calcination is natural gas instead of coal. The source echoed the former market participant, saying staggered production may be enforced during the winter heating season, leading to slashed output.

Operation rates in Guizhou province, another bauxite production hub in China, were less affected by the environmental regulations compared with that of Shanxi province. However, environmental protection and regulation policies still exerted pressure on supply to an unknown degree, according to a refractory-grade bauxite producer in Guizhou.

Despite the supply disruption to refractory-grade bauxite, prices of the four grades assessed by Fastmarkets remained flat due to the weakening demand. One producer in Shanxi said: "Currently, the price keeps firm, but we’ve got no market for the product."

Fastmarkets' fortnightly assessment of bauxite, refractory-grade, 85%/2.0/3.15-3.2 (0-6mm), fob Xingang stood at $380-390 per tonne on Thursday September 19, in line with the previous assessment.

Assessment for bauxite, refractory-grade, 86%/2.0/3.15-3.2 (0-6mm), fob Xingang held still at $390-410 per tonne, while the price of bauxite, refractory-grade, 87%/2.0/3.15-3.2 (0-6mm), fob Xingang was unchanged at $420-440 per tonne.

Fastmarkets’ bauxite, refractory-grade, 88%/2.0/3.15-3.2 (0-6mm), fob Xingang price was also stable on a fortnightly basis at $440-460 per tonne on Thursday September 19.

Bauxite, refractory-grade, 85%/2.0/3.15-3.2 (0-6mm), fob Xingang, $/tonne 
Prices1  
Source: Fastmarkets 

Alumina

Fused alumina in Henan and Shandong

Sybil Pan

Given that calcined bauxite serves as a feedstock for brown fused alumina, the supply disruption on the former is expected to lead to the same trend on the latter. Moreover, factories producing brown fused alumina are going through safety regulations, as well as environmental regulations, after the explosion at an abrasives factory in the city of Dengfeng in Henan province in June.

Compared with the production of brown fused alumina, factories producing white fused alumina are less concerned with the shortage of feedstock due to ample supply of alumina derived from the Bayer process (smelter grade alumina, SGA) for most of the first nine months of 2019.

"Fused alumina factories in Zhengzhou city, Henan province, are all closed now because of the 70th anniversary [on October 1]," according to one fused alumina producer in Henan. "The closure will last until October 7, the end of the national holiday period. Currently, the market is supported by the [Bayer-derived] stock. How long the stock will last depends on market demand."

The same source told Fastmarkets that if the closure continues after the national holiday, there may be supply disruptions in Henan whereas the situation will be better in Shandong due to less rigid regulations.

Another fused alumina producer in Henan province said "limited production will be expected and the one third of total capacity could be affected."

Nevertheless, weak demand from the refractory industry almost around the world has contributed to a relatively quiet market for fused alumina.

Fastmarkets' latest fortnightly assessment of alumina, fused brown, min 95% Al2O3, refractory sized (0-6mm) was at $750-760 per tonne on September 19, unchanged from the previous assessment.

For abrasive grade material, the price of alumina, fused brown, min 95% Al2O3, FEPA F8-220 grit, fob China was assessed at $800-830 per tonne on the same day, $10 per tonne lower on the high end against the previous assessment.

Meanwhile, alumina, fused white, 25kg bags, cif Europe was at €715-830 ($788-914) per tonne on September 19, €20 per tonne higher on the top end of the range due to deals done by fused alumina producers outside China.


Soda ash

Single-digit increase in soda ash contract prices predicted by sell side

Michael Greenfield

A year of good demand in 2019 has followed a period of tightness in the soda ash market that resulted in price increases last year. Fastmarkets spoke to the sell-side of the market to canvass sentiment a week before the IHS’s World Soda Ash conference.

Fastmarkets attended the annual event in Cannes, France, on September 24-26. It is typically used by the market to start negotiations for annual contracts.

Last year, several sellers reported achieving double-digit price increases and selling out in the midst of a tight market. Twelve months on, sentiment is still positive albeit more mixed.

"I think there is a steadily growing counter-argument that the buying side is trying to propagate," one producer said. "[This] is that there is more product than expected coming out of Turkey and more product going to Southeast Asia, which could have a knock-on effect [if volumes from Europe to go overseas markets]."

The new Ciner plant in Turkey, with capacity for 2.5 million tonnes per year of soda ash, and which completed its ramp-up in the second half of 2018, has been recently producing at a rate 2-3% above its nameplate capacity each month. The additional volumes above nameplate, roughly 6,500 tonnes per month, have been reported as being consumed by the flat glass industry.

"Demand is slowing a little. If the Ciech plant [in Romania] does ultimately close, it would offset some of the slowing demand and maintain the status quo. So, it is stating the obvious but [the Ciech plant halting production] can only help to tighten things," the producer added.

Ciech’s 600,000 tpy plant in Romania stopped producing on September 18, and at the time of writing, it looks unlikely that a resolution will be found for the plant’s steam supply, the price for which has increased steeply, before the end of the year.

Two sources that Fastmarkets spoke to believed the plant is producing 400,000-450,000 tonnes per year. 

"The market will balance out in the end. Other European producers will supply the gap left by the Ciech plant, which might see material move from West to East Europe. More material from Turkey may then come into Western Europe," a distributor said.

The market in the United States has also seen one plant close for an uncertain amount of time, with Searles Valley Minerals declaring force majeure at its 1.2 million tpy plant in California after a series of earthquakes.

"The Searles Valley closure hasn’t had an effect on the market, which must be due to weak demand in Asia," the distributor added. "So I do think that, overall, the supply and demand dynamic has balanced out."

Globally, demand for soda ash has been good this year. There has been 4% growth in the container glass sector this year, according to the distributor, while a second producer described the sector as "dynamic." 

"It is only [demand for] flat glass for the automotive sector that is slowing a little," a third producer said. "Even with this, soda ash demand is firm. It is true that Turkey is producing more material, but the US and Chinese markets are both slow."

The third producer added that automotive glass accounts for around 7-8% of total soda ash demand, and any slowing of that market would have a minimal negative effect. All four sources quoted in this article agreed that demand from the automotive sector had been poor this year.

The distributor reported that car sales were down by 45% in India year on year, while China has also taken a hit with consumers holding back from buying diesel and petrol cars.

Overall, three market participants believed that a single-digit price increase would be accepted, although the distributor warned about a "mixed" picture of supply and demand.

The third producer, however, was aiming for a price rise of nearly $20 per tonne because the market "is not long." He added that 2018 and 2019 had not necessarily been good years, a view that was echoed by other producers.

Fastmarkets’ monthly assessment of the price for soda ash, natural and synthetic, dense and light, large contracts, delivered Europe, was €200-235 ($221-259) per tonne on August 29.

Soda ash, natural and synthetic, dense and light, large contracts,
delivered Europe, €/tonne 
Prices2  
Source: Fastmarkets 


Zircon

Zircon market drops amid weaker fundamentals

Declan Conway

The zircon market is dropping, with suppliers beginning price negotiations with their customers heading into the last quarter of 2019, market participants told Fastmarkets on Thursday September 19. 

Weaker fundamentals are making further losses a possibility, particularly in standard grade, the sources added.

Fastmarkets assessed the price of zircon, premium grade, 66.5% ZrO2 min, bulk, cif China at $1,500-1,600 per tonne on September 19, down by $50 per tonne in the past week.

The price of zircon, standard grade, 65.5% ZrO2, cif China was assessed at $1,400-1,550 per tonne on the same day, narrowing downward by $50 per tonne.

And the price of zircon, premium grade, min 66.5% ZrO2, cif Spain fell by $50 to $1,500-1,600 per tonne week on week on Thursday.

At the Zircon Industry Association (ZIA) conference in Dubai a couple of weeks ago, one major Chinese miller told delegates that he expected to see falling demand.

World zircon demand was expected to drop to 1 million tonnes in 2019 and to 850,000-900,000 tonnes for the "next couple of years," according to Lincoln Ying, chief executive officer at Matrix, one of China’s biggest producers of zircon opacifiers.

That would compare with a peak of 1.6 million tonnes in 2011, he said, adding that he did not expect an increase in demand in the next few years, blaming the move on substitution in the tile industry in China and elsewhere since that year.

"There is definitely some softening on zircon, but prices are still way above the range mentioned by some for premiums at $1,350-1,550 per tonne," one supplier told Fastmarkets this week.

"Previously, our floor price was $1,600 per tonne, and we recognize that we will have to make some concession for the fourth quarter. That decision is not yet finalized, but we are thinking $30-50 per tonne down, and obviously standard grade will be well below that level," the same supplier said.

"The zircon markets are certainly moving," another supplier said, "but we have heard of only Iluka and Tronox giving certain customers discounts in a few markets, such as India and China. We would agree that almost all international sales are now below $1,600 per tonne, perhaps even below $1,550 per tonne once rebates have been accounted.

"However, we have not heard anything as low as $1,350 per tonne unless it is off-spec material," the second supplier said. "For example, most standard zircon products are minimum 64.5% ZrO2, and we have heard of suppliers offering 63% ZrO2 for around $1,400 per tonne. Perhaps the $1,350 per tonne being mentioned is for even lower ZrO2.

"It’s a bloody red ocean out there right now, so I expect prices to trend downward for the next 12-18 months, unfortunately," the second supplier added.

One trader thought it would be "suicide" for suppliers if prices were allowed to move upward, given current business conditions heading into fourth-quarter delivery settlements.

"There is an inertia to lower prices," the trader said, "but there is no shortage of supplies and the world economy is weakening, so it makes no sense to hold prices at relatively high levels."

In August this year, major zircon producer Iluka said that trade headwinds created by tariff issues and Chinese environmental controls were threatening the demand for zircon from the ceramic industry. The company, the world’s biggest producer of zircon, downgraded its sales forecasts in the wake of weakening international economic conditions.

The company’s managing director, Tom O’Leary, said that a previously expected increase in zircon sales in the second half of 2019 would not materialize. Zircon sales prices were expected to drop in the second half, due to a market shift toward standard grade sales, he said.

Still, the company maintained its zircon reference price at $1,580 per tonne until the end of March 2020.

Zircon, standard grade, 65.5% ZrO2 min, cif China, $/tonne 
Prices3  
Source: Fastmarkets 

Zircon, premium grade, 66.5% ZrO2 min, bulk, cif China, $/tonne 
Prices4  
Source: Fastmarkets 

Magnesia

China’s magnesia prices drift lower, magnesite mining halt expected to extend

Carrie Shi

Magnesia prices in China continued to fall in the week ended Tuesday September 17, with a flurry of lower offers from producers eager to sell, especially dead burned magnesia (DBM) and fused magnesia (FM).

Downstream refractory buyers continued to show limited interest in purchases for restocking, however.

The Haicheng region of Liaoning province imposed a three-month halt on magnesia mining which started on August 1 and will last until October 31, therefore including the national holiday in China on October 1-7 for the country’s 70th anniversary celebrations.

Such stoppages have been used to support magnesite prices to some degree in previous years, but this time the prices have stayed on a downtrend due to the increasing stocks in the spot market and thin buying among downstream refractory buyers.

Moreover, Liaoning province will impose new regulations on mines from October 1 this year, intended to optimize and upgrade the industrial structure of traditional mines by speeding up developments in technology and equipment.

Liaoning will also continue to promote the consolidation of local mining enterprises which are subject to potential safety hazards or which have substandard performance on emissions.

Most magnesia producers believe that strict control of magnesia mining will continue after the three-month halt, because of the new regulations, but this was expected to stop prices falling further.

"I think the new regulations on mines in Liaoning will bring continuing strict control on magnesite mining, and are expected to give some support to magnesia prices [by restricting the output] of raw materials. But due to there being sufficient stocks, magnesia prices will not increase significantly, in my opinion," a producer told Fastmarkets.

"Magnesia prices are still under downward pressure this week," a buyer said. "Demand from refractories remains sluggish for the moment, and more producers have lowered prices to attract more deals. We have received several lower offers from Chinese suppliers."

Fastmarkets’ latest assessment of the spot price for magnesia, dead burned, 90% MgO, lump, fob China, was $180-210 per tonne on September 17, down from $210-230 per tonne in the previous week, while magnesia, dead burned, 97.5% MgO lump, fob China, was $550-650 per tonne on the same day, down from $600-700 per tonne seven days earlier.

Magnesia, dead burned, 97.5% MgO, lump, fob China, $/tonne
Prices5  
Source: Fastmarkets 

Iodine

Iodine spot price hits four-year high

Michael Greenfield

Spot market prices for iodine have risen to their highest level in more than four years, climbing to $35 per kg at the top end of the range in recent assessments while market tightness continued to underpin price increases.

Fastmarkets’ price assessment for iodine, 99.5% min, spot, delivered US/Europe, cif Asia, was $29-35 per kg on Thursday September 12.

It was May 2015 when the price was last at $35 per kg at the top end of the range. That was also the latest assessment in which the range was as wide as $6 per kg.

The widening range and four-year high have been caused by Chilean producers, which account for more than half the market, pushing prices higher in a tight market while Japanese producers have been less aggressive with their price increases.

At the bottom end, a derivatives producer said that Japanese iodine was "still under $30 per kg" while an ex-China producer assessed the spot market at $29-30 per kg.

Prices of $35 per kg had been reported since the start of August. But without confirmation of such prices from the buy side of the market, Fastmarkets was reluctant to move its assessment price to that level.

With less than three weeks remaining until the fourth quarter of 2019 begins, market participants have been assessing the level at which they believe offers will be made at the start of October.

There was a consensus in the market that offers from Chile will start at $34-35 per kg for long-term customers and high-volume consumers.

Those prices are currently being achieved for new business and small volumes, with transactions for full containers typically being finalized at $32-33 per kg.

"In the case that Chilean producers increase their asking price to $34-35 per kg in the next quarter, we will move up to $31-32 per kg," the ex-China producer said.

A distributor said that his prices would "certainly [be] at $35 per kg for the fourth quarter."


Fluorspar

Chinese acidspar prices flat despite soft market

Michael Greenfield

Prices in China’s acidspar export market held steady in the week ended Friday September 13 although demand and sentiment were soft in the domestic markets.

The run-up to the Mid-Autumn Festival holiday on September 13-15 meant that there was little trading activity, while the downstream hydrofluoric acid (HF) market remained weak, with more producers lowering their prices to boost sales while the market was quiet.

Fastmarkets’ assessment for fluorspar, acidspar, 97% CaF2, wet filtercake, fob China, was $430-500 per tonne on September 12. The price was flat from the previous week, but down by $20 per tonne from the week before.

Most exporters maintained their current offers ahead of the holiday, with limited new orders received from overseas buyers.

Buyers kept pressing prices downward and were unwilling to accept higher figures due to the sluggishness of the downstream sectors.

"I haven’t adjusted export prices this week with the approach of the holiday. Domestic fluorspar acidspar prices stayed soft, in the range of 2,700-3,000 yuan [$382-424] per tonne," a producer told Fastmarkets.

"The downstream HF and refrigerants markets showed no improvement, with prices on a downward trend and giving less support to raw materials. We had no deals concluded this week, and I think prices will mostly stay in the current range this month because of the National Day holiday [on October 1-7]," a trader said.

Prices of 9,500-10,000 yuan per tonne or even lower were heard for HF on the spot market, falling from 9,800-10,400 yuan per tonne in the previous week, and most refrigerant product prices also drifted lower.

China and the United States have been occupied by their trade war, and although the fluorspar market has not been affected, the two nations’ acidspar markets have been.

Tightness has hit North America, according to sources, despite there being some additional volumes going into that market this year.

"The US market is very tight - that’s what we are witnessing," a trader told Fastmarkets. "We haven’t seen any effect [on price] from material coming [from new producer Canada Fluorspar (CFI)]."

A producer told Fastmarkets that the US market must be tight given the requests for mat-erial it had received from the market, which is home to companies that "have professional management of their supply chains."

CFI is ramping up its output, and several ships have entered US ports since the first shipment left the junior miner in August last year.

But although new material has reached US shores, this has been balanced by Chemours opening a new refrigerant plant in Corpus Christi, Texas. The company has not yet disclosed the additional demand created by this.

A ship from CFI entered Rotterdam port two weeks ago, according to three sources, and two more boats were reported to be on the water.

The monthly price for fluorspar, acidspar, 97% CaF2, wet filtercake, cif Rotterdam, was assessed at $500-540 per tonne on August 29. This was steady since the end of May but down from the assessment of $520-575 per tonne on April 25.


Chromite

Shrinking seller margins could slow down chromite price falls

Davide Ghilotti

Chromite prices were stable in the first half of September, with market participants arguing that the bearishness that has taken hold of the entire chrome and alloys sector could be affecting the ability of sellers to push prices further down.

Foundry grade chromite prices have just about halved in value since the beginning of the year amid widespread oversupply and sluggish demand.

Fastmarkets IM’s price assessment for chromite, foundry, 46% Cr2O3 min, wet bulk fob South Africa, dropped to $240-250 per tonne on Tuesday September 10, from $450-490 per tonne in January - a fall of about 48%.

And the price assessment for chromite, foundry 46% Cr2O3 min, dried and bagged fob South Africa, was $300-410 per tonne on September 10, compared with $530-570 per tonne in January.

Both grades have remained largely stable since September.

Market participants said the impact of the wider basket of chrome-based products that large, integrated producers handle - including metallurgical chrome ore as well as ferro-chrome alloys - could be having a slowing effect on the price falls affecting non-met chromite grades.

For a number of large-scale producers handling both met-grade chrome and alloys as well as non-met chromite, the bulk of their revenues and margins are generated in the metallurgical/alloys division. Non-met normally accounts for a smaller share of overall turnover.

But due to the weak performance of the metallurgical and alloys market, sellers have now less room for maneuver when it comes to the elasticity of non-met prices.

"We are seeing, arguably for the first time this year, that prices are bearish across the whole chrome basket," one producer said. "We are seeing terrible met, terrible chem and terrible foundry prices now. Revenues for the basket of products is really low."

That is bound to have an impact on pricing strategies for non-met, he added.

This week, lawyers acting for South African ferro-chrome producer Hernic Ferro-chrome said how low Chinese tender prices in recent months and the drop in the European ferro-chrome benchmark for the fourth quarter reflected a price environment in which most producer margins are challenged. 

Fastmarkets’ price assessment for ferro-chrome high carbon 6-8.5% C, basis 60-70% Cr, max 1.5% Si, delivered Europe was 74-80 cents per lb on Friday September 27, down about 20 cents since the beginning of the year. Prices for this grade remain at their lowest level for several years.

Fastmarkets’ chrome ore South Africa UG2 concentrates index basis 42%, cif China stood at $155 per tonne on September 27, slowly recovering after falling as low as $140 in July.

"If, earlier in the year, sellers could have afforded to drop their non-met prices because they somehow could cover for that through the met and alloys products, now this is becoming increasingly challenging [to do]," a second producer said.

This may affect seller willingness to give in to further price cuts, because their baseline revenues in met and alloys are also under pressure.

"I think we are hitting cost-support levels," he added. "This should support a bottoming out."



Lithium

China’s lithium prices rangebound after Golden Week holiday

Carrie Shi

Spot battery grade lithium carbonate prices remained rangebound in the first week after the Golden Week national holiday in China, with downstream buyers in no hurry to purchase more material in the expectation that prices will fall.

Fastmarkets’ assessment of the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China, was 56,000-61,000 yuan ($7,859-8,560) per tonne on Thursday October 10, unchanged from the previous week.

"As most market participants have just come back from the holiday, the lithium carbonate market has seen limited fluctuations, with most prices stable at current levels," a downstream buyer told Fastmarkets. "Although some lower prices have been heard, mainstream prices are unchanged at 56,000-58,000 yuan per tonne."

Technical and industrial-grade lithium carbonate mostly stayed at the low end of 47,000-48.000 yuan per tonne, although lower prices of around 45,000 yuan per tonne or lower were also heard.

The battery grade lithium hydroxide market saw no improvements with prices standing still after the holiday on weak downstream demand.

Fastmarkets’ assessment of the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range exw domestic China, was 60,000-68,000 yuan per tonne on October 10, unchanged from the previous week.

"Mainstream prices for battery grade lithium hydroxide are at around 60,000-63,000 yuan per tonne with no changes after the holiday, with micro-grade at above 65,000 yuan per tonne," a producer source said.

"China’s domestic demand is [unlikely] to increase in the short term [and that] will continue putting pressure on prices," he added.

Seaborne Asian lithium market quiet

The seaborne battery grade lithium spot market was quiet due to lack of downstream buying, with only limited spot transactions reported.

Fastmarkets’ assessment of lithium carbonate, 99.5% Li2CO3 min, battery grade spot prices cif China, Japan & South Korea was unchanged at $9-11 per kg, while the assessment of lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade spot prices cif China, Japan & South Korea was stable at $11-13 per kg.

"As the holiday has just passed, there have been no changes in seaborne Asian prices and most buyers will negotiate new contracts at the end of this year," a second producer source told Fastmarkets. "But the new prices will be much lower."

European and US spot prices unchanged

Battery-grade lithium carbonate and lithium hydroxide spot market prices in Europe and the United States remained stable amid quiet trading conditions, although some offers were under negotiation.

Fastmarkets’ assessed the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US, at $11-13 per kg on October 10, while the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price ddp Europe and US was $12.50-13.50 per kg.

Market participants were split over whether prices could find some support in the typical restocking season. According to some, the recent oversupply is starting to ease allowing them to test slightly higher prices.

"Prices are firming; or at least they have stopped falling [and] we have made offers and are awaiting [a response]," a third producer said.

Most market participants still believe there is sufficient material in the European and US markets and remain skeptical about any price increases because there is no real significant incentive for buyers to purchase significant volumes.

"The market is well-supplied… there is enough material to at least cover Q4 [and] we expect prices to continue at current levels until the end of the year," a second buyer told Fastmarkets.

Cristina Belda in London contributed to this report.

Lithium carbonate 99% Li2CO3 min, technical and industrial grade,
spot price range exw domestic China, yuan/tonne
 
Prices6  
Source: Fastmarkets 

Lithium hydroxide 56.5-57.5% LiOH.H2O, large contracts, packed in drums
or bags, delivered Europe/US, $/kg 
Prices7  
Source: Fastmarkets