The first half of 2020 was marred by a series of mining
closures and logistical issues in the major production regions
of andalusite, the refractory raw material.
Andalusite miners in South Africa and Peru were hit by
nationwide lockdowns imposed by their respective governments to
try to contain the spread of the Covid-19 virus.
This brought andalusite production to a standstill between
March and April. Market sources estimated that global output
could be down by as much as 20,000 tonnes this year, although
some estimated it to be closer to 25,000-30,000 tonnes
Andalusite Resources and Imerys, the two producers with
operations in South Africa, were affected by a closure lasting
almost five weeks. Sources active in the market have estimated
that a combined total of around 15,000 tonnes of supply may
have been lost between the two.
Peru, another main supplier of the material to the
international market, also halted operations during a closure
of more than one month. Sources in the market estimated a loss
of output of about 4,000-5,000 tonnes in Peru during the
Production was now understood to be back on track in all
origins, with miners ramping up and trying to recover some of
the lost volumes.
"Production is about 85% of normal now, but [international]
demand appears to be strong," one producer said.
"We are gradually recovering from the lost time and we are
meeting our existing orders," another producer added.
Some market prices showed a marginal upward adjustment as a
result of the pressure on supply triggered by lower output and
logistics disruptions. Fastmarkets assessed the price for andalusite, 57% Al2O3 min, cif Europe, at
€320-440 ($379-521) per tonne on May 28, up from
€310-430 per tonne on February 27.
"Logistical issues, delays all over the place and,
generally, less material are all affecting delivered prices
into main markets," a consumer said at the time.
Meanwhile, Fastmarkets’ quarterly price
assessment for andalusite, 57% Al2O3 min, fob South
Africa, was stable at €260-340 per tonne on May
But supply was only one part of a two-sided problem
affecting the andalusite sector.
Demand, particularly in key consuming markets such as
Europe, took a hit with refractories producers seeking to
review their purchasing plans in light of poorly performing
steel, automotive and industrial markets.
Market sources, however, believed that supply may have
dropped further than demand, and tightness could still
characterize trading conditions in the coming months. One
supplier estimated a drop in demand of around 5,000-8,000
tonnes, compared with "at least three times more in terms of
These conditions were reflected in Fastmarkets’
higher price assessments on a delivered Europe basis.
The fundamentals of the sector concurred to support a degree
of balance between supply and demand, even amid the current
conditions. Global andalusite output was estimated at about
300,000 tpy, according to industry sources in contact with
This volume excluded China, where a couple of local
operations were reported to add some 10,000-15,000 tpy, all
In contrast with other refractory raw materials, such as
magnesia or graphite, andalusite supply – being
controlled by a small number of suppliers and origins
– tends to be broadly in line with general demand.
Contracting is, for the most part, settled on long-term
agreements which are mainly yearly or half-yearly, compared
with a comparatively small spot market.
This means that free stock volumes tend to be lower than in
other refractory markets that rely more on spot trading. Price
fluctuation, as a result, is limited in this market compared
with those for other raw materials.
At the time of writing, demand was seen to be recovering to
"We saw demand falling slightly in some markets but
increasing in others. Considering the lower output, we
don’t expect much of an imbalance, after all," one
"There is now an equilibrium between what we are producing
and the orders we have," another supplier said. "We
don’t have any volumes unsold for the rest of the
year. Prices are steady and, in certain markets, we could even
achieve a marginal increase."
This article was first published in the September 2020 issue of Metal Market
Magazine, which carries in-depth feature articles, analyses
and reviews of metal and steel markets.