Heading into the Spring Festival holiday, antimony trioxide prices appear to have stabilized around USD 10,000/MT (Sb203 99.65% FOB). But inventories, which have been piling-up due to persisting slow demand, particularly from Europe, are still putting downward pressure on prices.
Many Chinese antimony exporters stopped offering material prior to the holiday, citing government inspections, but efforts to support export prices will not likely lead to higher prices until orders begin increasing.
Image courtesy of Metal-pages.com
2011 was for the minor metals, like it was for many commodities, a year of two halves. The first few months saw prices rising to near - and sometimes past - their pre-financial crisis levels, as end-users breathed a sigh of relief when the worst of the crisis seemed to have passed. But the euphoria was short-lived.
By June and July, it was becoming evident that the sovereign debt levels in the US and Europe were going to weigh heavily on governments' abilities to continue supporting economic recovery with further fiscal stimulus. Markets and commodity prices stuttered. Copper started to fall from its record levels by the end of July and the industrial minor metals, molybdenum, cobalt, tungsten and manganese, followed.
By September, all eyes had turned east to see whether China could pick-up the slack in demand, as it had two years earlier. But China's hands seemed tied as it continues to try and address inflation and liquidity issues that have stemmed from its 2008 monetary stimulus.
Gallium and indium producers have, in recent years, repeatedly identified CIGS (Copper Indium Gallium diSelenide) solar technology as an increasingly important market for their production, with new demand from this sector being a justification for price increases and capacity expansion.
Unfortunately for those depending on the growth of CIGS technology, recent months have provided nothing but a series of bad news. Most recently, First Solar Inc. - the market leader in photovoltaic (PV) cells - announced that it will be ending its CIGS research program.
The announcement follows CIGS specialist Solyndra LLC's application for bankruptcy protection in August and Aurubis' closure of CIS Solartechnik last month.
With intense competition at both the corporate and national levels, the profitability of solar energy companies is under growing pressure. Government austerity measures, low energy prices and slow economic growth contributed to First Solar cutting its 2011 sales expectations.
Both indium and gallium prices have been fighting to find some stability since they began falling in August.
Chart courtesy of Metal-pages.com
A short pause in November has been the only recent respite from the current decline in indium prices. With lower than expected third quarter orders and high inventories, the price of indium has been pushed to its lowest point since late 2010, trading around US$ 550/kg. Some producers are beginning to hold material, unwilling to sell at the current price, rather choosing to wait - and hope - for something better in 2012.
Chart courtesy: Metal-pages.com
The precipitous decline of rare earth prices since September seems to, at least temporarily, have put a damper on the hype that had been building over the past few years. The relative calm provides a good opportunity to reflect on the recent evolution of the rare earth element (REE) industry and, as I see it, some prevailing misconceptions that have been driving the industry since 2009.
Background: Enter Investors and the Media
REE's entrance into the investment community's spotlight brought with it previously unthinkable levels of media coverage. What was once a colloquial industry quickly became the topic for resource investors, as the drastic cuts to China's rare earth export quotas caught the attention of not only business reports, but also political analysts and technology reports. Even National Geographic couldn't turn away from the story of REEs, which formed a 'perfect storm' of high trending news topics: geopolitical confrontation, China, national defense and green technologies, energy dependency and, of course, investment opportunities.
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| Chart c/o Metal-Pages.com |
Unfortunately, the sudden influx of interest in REEs created a void of persons with expertise in the elements themselves. Global production having, in effect, completely moved to China during the three decades prior, few in the West were knowledgeable of both the production (supply) and end-uses (demand) to effectively comment on and analyze the developments. The media was left wonting for information and, so, turned to any individuals and companies with involvement in the industry; traders, investors and exploration and development companies.
The major problem with this was that the vast majority of players within these groups had vested interests in promoting the demand potential for REEs, as well as the supply side risks of Chinese REEs. There was - and continues to be - little incentive to dispel sensational reports that China will cut off all supply of REEs to the West or that REEs are the battlefield for a geopolitical war over green technologies.
The herd of investors and commentators has grown daily over the past two years, while the few balanced analyses produced during this time have been lost amongst more alluring headlines calling for REE stockpiles, national REE 'strategies', subsidies for domestic production and REE self-sufficiency; common nationalistic responses that have been seen in other resource industries suffering from supply shocks, but which have been proven more or less ineffective in actually impacting long-term supply constraints.
Continue reading "Looking Back: The Evolution of the Rare Earth Industry (2009-2011)" »
Indium tin oxide (ITO) has been critical to the development and success of flat panel displays over the past decade and is expected by many to be a key component in the continuing development of high efficiency solar cells. However, a new technology under development by Duke chemist Ben Wiley may displace ITO and, consequently, have a significant impact on indium markets.
The research, outlined in the August 24th issue of Advanced Materials shows that copper nanowires produced in water can form long, thin, non-clumping wires, which can be used to manufacture transparent films that have the same properties as ITO films, but would be significantly cheaper to produce. The copper nanowires have also shown to be more durable than their counterpart, able to withstand repeated bending while retaining conductivity.
The demand for ITO for use in flat screen TVs, smart phones and solar cells has led the price of indium from around $ 150 per kilogram in 2000 to highs above $ 1000 per kilogram in 2005. Currently, indium metal prices are around US$ 650 per kilogram.By contrast, copper prices, while historically high, are only about US$ 9 per kilogram.
A new flexible, transparent film made from copper nanowires could compete with thin films produced using ITO. Image c/o Ben Wiley, Duke University
The British Geological Survey (BGS) is the latest government body to release its opinion on what strategic elements are at the greatest risk to supply disruptions. The BGR's Risk List 2011 analyzes 52 "chemical elements" (primarily metal elements) and ranks them according to what it determines to be their risk to supply.
Risk to supply was determined by BGS by scoring quantitative data for four criteria: (1) scarcity, (2) production concentration, (3) reserve base distribution and (4) governance. Equal weight was given to each criterion.
According the Risk List, the 25 elements - or groups of elements - most at risk to supply disruptions are:
For the complete list, click here (.pdf download).
As opposed to many similar analyses, the BGS Risk List does not take into account end-use applications of the elements and, therefore, does not evaluate the 'criticality' or strategic nature of the elements. Instead, the BGS simply puts forth what it sees as the elements most at risk to supply disruptions.
Proxies:
One of the major problems with creating an analysis of this type is whether the proxy data accurately evaluates what, in theory, it is intended to analyze. In this case, there are four criteria that the authors believe reflect the threat of supply disruptions. Supply concentration is very much related to the risk to supply and is aptly measured by the amount of production coming from specific countries. However, scarcity and reserve distribution are not as clearly distinguishable.
To measure scarcity by looking at content of an element in the earth's crust ignores the fact that not all ore bodies are created equal. Gallium found in gallite is not the same as gallium found in bauxite, just as zirconium found in kosnarite is not the same as zirconium found in the mineral zircon. This problem also affects the evaluation of reserve distribution. Technical separation issues and simple economics cannot be ignored.
Continue reading "The British Geological Survey: Risk List 2011" »
After a slow summer, which saw germanium prices remain relatively strong despite weak demand, prices for germanium metal and germanium dioxide can expect increasing pressure to move downward in the final quarter of 2011.
Demand for germanium metal remains depressed, mainly as a result of the decreasing US and NATO military activity in Iraq and Afghanistan.
In addition, germanium production at China's Shaoguan smelter is reportedly on schedule to resume later this year, which would bring greater supply to a market short on buyers.
With global economic uncertainty beginning to impact metal markets, it is safe to expect end-users to remain cautious in their purchasing, with spot orders being made only as necessary.
Chart courtesy: www.metal-pages.com
