The andalusite market has been supported by strong
fundamentals since the beginning of the year due to
intermittent issues affecting production operations and a
progressive worsening of international transport
Raw material markets have been recovering quickly after the
steep drops in traded volumes and demand during 2020 at the
height of the Covid-19 pandemic. Industrial activity,
investment and capital deployment now show a rebound after last
year’s lows, pushing up prices and demand for
While the andalusite market is generally more balanced in
terms of supply and demand than other refractory minerals such
as magnesia or chromite, growing pressure from consumers as
demand returns has left supply struggling to keep up.
Earlier this year, Fastmarkets reported production issues in
South Africa, with one instance of temporary force
majeure at a mine after community unrest and intermittent
power outages affecting output at other mines too. The price of
andalusite moved higher due to the production slowdown and the
effect of rising freight costs on delivered prices.
Fastmarkets assessed the price of andalusite, 57% Al2O3 min,
cif Europe at €350-440 ($413-519) per tonne on August 27,
unchanged from May but up 5% from €325-425 per tonne in
February. The February price was already €5 up on both
ends from the previous quarterly assessment in November
"Price is secondary to being able to secure the volumes
right now," one consumer said. "There is tightness everywhere
and consignments are late."
A producer source told Fastmarkets they have received
several requests for additional volumes from their customers,
who want to purchase more than what they had contracted for
this year. The source said he was "unable to meet any of those
requests" and he was sold out until 2022.
This sense of tightness is being felt further down the
chain. An agent distributing andalusite in southern Europe
described a similar situation. "We are not receiving any more
volumes until next year," the source said in late August.
"There is demand from our customers: they all want to buy more,
but we can’t supply."
Sources on both sides of the market stated that strained
logistics and increasing shipping costs continue to be a
leading source of concern.
Sea freight costs have been increasing since the fourth
quarter of 2020. Initially, this only affected container
freight out of China towards other destinations, but in the
following months the issues began to affect other seaborne
routes such as South Africa to Asia, South Africa to Europe,
and Latin America to Europe. Costs have also risen for bulk
freight and the ongoing capacity shortage is leading to long
delays and congestion.
"The logistics mess is compounding the issue of tighter
supply at a time of high demand," one buyer said.
Global andalusite output in an average year is estimated to be
around 300,000 tonnes, excluding China, which accounts for
another 10,000-15,000 tonnes, although those volumes are all
consumed internally. China is a net importer of the raw
"It’s early to say what global output will be this
year, but I can tell you this – not a single tonne is
going spare," a seller said.
Tightness in alternative raw
As Fastmarkets reported earlier this year, recent developments
affecting other raw material markets are compounding the sense
of tightness that andalusite market participants are
Following an electrical incident,
Imerys’ mullite plant in Georgia, the United
States, was offline for almost a month during April and May.
The company restarted its operations in mid-May and has been
working since then to recover the production shortfall. Mullite
and andalusite can be used as alternative feedstock in some
Bauxite can be used as a substitute in some applications, too,
although mullite tends to be a preferred alternative.
"Mullite 60% is the first alternative to andalusite. The two
are the closest relatives. So, the issues you have in
alternative markets such as mullite are affecting andalusite,"
a trader said.
Likewise, supply of Chinese refractory grade bauxite has been
limited since the beginning of the year, owing to ongoing
mining restrictions and widespread logistics bottlenecks, at a
time when demand from buyers is growing fast.
The price assessment for bauxite, refractory-grade,
85%/2.0/3.15-3.2 (0-6mm), fob Xingang stood at $420-430 per
tonne in August, up from $385-395 per tonne in
Supply concerns abound over supply of bauxite from China later
this year and early next year. The winter months are likely to
bring another round of restrictions to heavy industry in China,
as will the Winter Olympics, due to take place in Beijing in
Logistics are also likely to continue to affect deliveries and
stock levels of bauxite in consuming markets. The perception of
low availability in related raw materials is adding to pressure
in the andalusite market, sources said, and is bound to shape
supply flows in the coming months.