Report highlights

Refinery production of indium in 2002 is estimated to have totalled almost 350t, a decline of around 7% from the 2001 level. Production is expected to fall further in 2003 following the closure of the Metaleurop plant and the reduction of indium-bearing ores available to Chinese producers.

Secondary recovery of indium first became significant in 1996 as a result of high market prices and concerns regarding available supplies of primary material. In subsequent years, increased supplies of primary indium discouraged recycling except in Japan, where secondary material constituted approximately half of the indium consumed in 2002.

Compound semiconductors form a small but high-value application for indium. Demand for these materials for the manufacture of laser diodes and photoreceptors was boosted by forecasts of high rates of growth in the optical telecommunications industry. This promise was not realised, and the semiconductor sector has declined in importance since 2000. Roskill estimates that world demand for indium in semiconductors in 2003 is less than 20tpy.

Indium prices have shown considerable instability over the past three decades. At the end of 2002 prices were at as low as US$70/kg despite steadily increasing demand, largely due to more than adequate supplies of low-priced material from China.

Due to tightness in the market, this situation changed radically in late-2002 and prices doubled in the first 9 months of 2003. Prices are expected to continue to rise through 2004 to reach US$250-300/kg, an increase which is likely to encourage more widespread recovery of indium from secondary materials and widen the supply base. This should, in turn, result in more stability and lessen the likelihood of further cycles of boom and slump in the indium market.