Andalusite deliveries have been significantly delayed by
severe floods in South Africa in April that damaged
infrastructure and created a logistical backlog that
exacerbated an already tight market.
Fastmarkets reported in November 2021 that demand in
2022 was expected to outstrip supply, and that tight supply and
soaring shipping costs had pushed up andalusite prices by an
average of 18% over three months.
Fastmarkets assessed its quarterly price for
andalusite, min 57% Al2O3, cif Europe, at €420-520
($438-542) per tonne on November 28, 2021, up from
€350-440 per tonne in August of that year. The price
subsequently held steady in February.
Commodity exporters in South Africa, the
world’s single largest producer of andalusite,
were hit by severe disruptions in April after the heaviest
rains in 60 years damaged road and rail infrastructure in the
province of KwaZulu-Natal, as well as Durban port.
In the final days of April, tens of thousands of
containers were stuck in Durban, a major export route for
various commodities from the African continent. The flooding
also caused a significant number of fatalities and a spate of
force majeure declarations in April by producers of
materials including andalusite, cobalt and copper.
Producers have been left struggling to ship material
and there was very little spot material on offer, market
sources told Fastmarkets in late April and early May. "Demand
is substantially higher than actual active capacity. There is
practically no andalusite on the market for spot buyers," one
purchasing source told Fastmarkets.
Extensive damage to rail infrastructure as a result of
the flooding meant cargoes needed to be retrieved from the rail
system. "All cargo on the rails, in the terminals and on the
tracks, is unable to reach its destination. It has had to be
taken out of the system," an andalusite market source
"This is affecting everyone. Due to high demand,
customers are really struggling to get material and producers
are struggling to send enough material. Shipments had a very
long lead time anyway, so this adds to it," the source
The floods built on an already significant strain on
commodity producers in South Africa, who have long been
beleaguered by escalating logistical and power constraints and
In 2021, andalusite market sources reported frequent
power shortages, labor shortages and interruptions at
production operations, including a force majeure
declaration at a mine due to community unrest.
Electricity load shedding
South Africa has suffered regular load shedding
– controlled blackouts designed to ease pressure on
the country’s power grid – so far in
2022, due to a lack of generating capacity.
The country’s state power utility, Eskom,
announced on May 3 that it was implementing Stage 2 load
shedding the same evening and that this would continue until
the morning of May 9. This followed the implementation of the
same protocol, as well as the more severe Stage 3 and Stage 4
load shedding protocols, at intervals over recent
"We are hard hit by power issues including load
shedding and the recent floods in Durban. Load shedding is not
over in South Africa by any means, and it has hit producers
really hard. It’s very challenging for producers
in South Africa, not just andalusite," an andalusite supplier
source told Fastmarkets.
"We are oversold by a country mile. We have not been
able to export half of what we would have exported in April
[due to the floods]. There is always a major issue to deal
with, and supply is not able to recover from one event before
there is another," the source added.
The stability of andalusite prices since November
meant that producers have not been able to pass on the extent
of their rising production costs, largely due to freight and
the cost of managing more recent disruptions. "We are passing
on as much freight cost as we can. We can’t
recover all these [rising] costs at this point; we must wait
until the next round of negotiations. We have to suck it up;
it’s better than not producing," the supplier
Another source confirmed stable contract prices, but
said that some costs were being passed on through surcharges,
which he said were becoming confusing due to rising costs for
"So far, I can only tell you that the prices in
general do not change. As everyone in the world is doing right
now, you pass on the particular cost of freight. Surcharges are
released by the shipping lines, [and] suppliers add container
surcharges per shipment on top of the andalusite price.
That’s what most people do," a third market source
"The price structure is really confusing; due to
different surcharges based on factors including destination and
equipment, you can lose track of what you need to cover to
cover your costs. Normally, [changes in costs] would be
absorbed, but [these] changes are too big and nobody has high
enough margins to cover thm," the source said.
The sharp upward change in the andalusite price in
November 2021 represented a 27% increase year-on-year, up from
$320-420 per tonne in November 2020.