Boron
Global demand for borates grew strongly in the three years to 2008, at up to 8%py, largely driven by growth in the Chinese market ? now the world?s largest ? where consumption rose by 15%py from 2000 to 2008. Growth in the market share held by Asian countries partly reflects the shift in production of textile-grade fibreglass, borosilicate glass and ceramics away from North America and Europe to countries with lower production costs.
Following the years of strong growth, 2009 saw a sharp drop in demand for borates, but, in the second half of the year, markets for both textile-grade fibreglass and borosilicate glass recovered and demand for borosilicate glass in LCD screens is expected to grow by 15% in 2010. An up-turn in construction activity should provide a recovering market for insulation-grade fibreglass in the medium term.
World production of natural and refined borates remains highly concentrated in Turkey and the USA; the two countries accounting for around 75% of supply. Chinese boron is inadequate in terms of both quantity and grade to meet domestic demand so the country is now the largest importer of both natural borates and boric acid.
Magnesium Compounds and Chemicals
China accounts for around two thirds of world production of refractory grade magnesia and has been a major supplier to the rest of the world. Over the past ten years, however, exports have declined by 5%py as domestic demand has increased and stringent export controls have been introduced. The main factor behind the growth in Chinese refractory production capacity has been demand from local steel mills, but exports of refractory bricks have also grown by 20%py since 2000.
Environmental applications for CCM and magnesium hydroxide are now the main growth drivers for magnesium compounds in developed economies, especially in water and effluent treatment. A potential emerging market for CCM is in high pressure acid leaching of nickel from lateritic ores.
The downturn in the global economy in 2008/9 has delayed investment in some of the projects to expand magnesite production outside China, but it is anticipated that, as the economy recovers, significant new DBM, FM and CCM capacity will come on stream in Australia, Brazil, Russia and Turkey.
Molybdenum
Between August 2008 and March 2009, molybdenum prices, responding to the global economic downturn, fell from US$34/lbMo to US$8/lbMo. This followed a four-year period when supply limitations and growing demand, principally from low alloy and stainless steels, sustained an average price of US$30/lb.
Stockpiling of imported roasted concentrates by Chinese traders and consumers resulted in prices rallying for a while in mid 2009. Through 2010 and 2011, market volatility is likely to continue but thereafter consumer demand for molybdenum in steel for process and power plant, as well as in oil and gas projects, will keep the market tight.
The availability of project finance will remain a problem for potential new producers outside China. The consequent under-investment in molybdenum projects in 2009 and 2010 will have consequences for supply as far ahead as 2015.What the report gives you
Nickel
The devastating financial crisis that affected the world in 2008/9 has had a wide-ranging impact. As with most commodities, participants in the nickel industry have had to make adjustments. Producers have been forced to make severe cuts to output, while stocks at LME warehouses have been rising steadily. China has proved the exception, with both demand and production rising.
Ever increasing demand from emerging markets, coupled with a return to positive growth in the developed world should see stainless steel production increase in 2010 and 2011. Further out, new supplies of nickel will be required to satisfy rising demand. The majority of new projects will mine laterite ores using HPAL technology, which has not always proved reliable. If new projects struggle to find their way onto the market, nickel prices could once again surge to US$50,000/t. Could Chinese nickel pig iron provide the answer?
Gypsum
Demand for gypsum is closely linked to general economic activity due to its use in construction in plasterboard, plasters and cement. Overall, world consumption of gypsum dropped 4% between 2006 and 2008, a total reduction of 8Mt, as a result of the global financial crisis and associated recession. Plasterboard and cement production are expected to take at least 2-3 years to regain the 2006 peak levels, but full economic recovery will see growth rates of between 4 and 7%py for cement and plasterboard respectively. Global consumption of gypsum could reach over 300Mt by 2015, from 216Mt in 2008.
Although natural gypsum still dominates the market, use of synthetic gypsum has grown rapidly during the past decade in particular. Three factors are responsible for this major shift in the market; stricter environmental regulations at coal-fired stations resulting in increased output of FGD gypsum, the high cost of environmental measures and resistance to accumulation of waste motivating power companies to sell usable waste products, and the low cost of FGD gypsum compared to natural gypsum. In the future, increased use of FGD and other suitable waste gypsum materials is assured for manufacture of plasterboard, plaster, cement and other materials.
Tantalum
There are mounting fears in the tantalum market that serious shortages are looming. Weak demand in consuming industries, particularly capacitors, coupled with large inventories in the supply chain, has kept tantalum prices low. Primary output has been slashed and processors are increasingly relying on stock drawdowns to make up the shortfall. If there is even a modest recovery in demand for tantalum in the near future, the market faces a difficult period.
A key issue is the continuing supply of low-cost columbite-tantalite (coltan) mined in Central Africa, mostly illegally, and sold to fund rebel militias. The major processors will not knowingly buy such material and almost all of it goes to China. The availability of large and growing quantities of cheap tantalum, at a time when global demand for consumer electronics is down and processors are holding substantial raw material stocks, has, however, placed the conventional tantalum industry under great pressure. Unable to win the large increase in prices it needed to be economic, the world's largest primary producer suspended mining operations in late 2008. It was soon followed by two others. Within the space of a few months, close to 40% of global primary tantalum capacity was taken out of the market. There are no guarantees as to when, or even if, it will be brought back into production.
The market will remain well-supplied for the time being. A key characteristic of the tantalum industry in recent years has been that supply has nearly always been greater than demand. As a result, large material inventories have been built up at most levels of the supply chain, generally as a result of take or pay contracts set up in the early part of the decade. Those stocks are not inexhaustible. In addition, the US strategic stockpile has gone for good and there are questions as how long tin slags can continue to constitute an important tantalum feedstock.
As has been the case in the past, processors are increasingly turning to scrap and other forms of secondary tantalum. Their receipts of secondary material grew by 70% in 2007 and by a further 25% in 2008. The growing use of scrap is evident in trade data.
The tantalum processing industry is attempting to develop systems to keep coltan out of the market by providing ways to physically indentify it before it is processed and becomes untraceable. Some processors are more committed to this than others, and the system is not yet fully in place, but the industry in general is facing mounting pressure from capacitor manufacturers and OEMs to ensure that coltan is not used. It is quite likely that the supply of coltan to the market will fall sharply over the next year or two. What will replace it? Production is being expanded in several countries but probably not by enough to replace coltan. Numerous new tantalum-niobium projects are in the pipeline and several would be very large producers. The big question is when they will come on-stream. Of the three mega-projects, one was originally planned to come into production in 2006, while another has been held up for over two years by red tape. The third may come into production in 2011.
Natural Graphite
Over the last decade, the development of thermal and chemical processes to produce high-purity natural graphite has enabled a more effective use of graphite resources, as lower grade ores and fines can be transformed into grades suitable for use in demanding applications such as batteries. Markets previously lost to synthetic graphite, such as batteries and carbon parts now offer opportunities for growth.
Chromium
The impact of the downturn on the global economy, starting in mid 2008, had a marked impact on the chromium market, as both prices and demand plummeted. In March 2009, European importers paid around US?86/lb for South African ferro-chrome, some 60% lower than prices (US?213/lb) paid in September 2008. Demand for chromium over this period has fallen sharply, as demand for stainless steel, the primary end-use for chromium, has collapsed. However, the predicted negative outlook for the chromium market in 2009 is likely to be short lived.