Indium prices have shot up US$ 40-50 per kilogram over the past two weeks based on Chinese speculators heading to North America and Europe to bid on the metal.
Speculators are assuming that the Fanya Exchange (discussed last month) will continue to buy up all Chinese indium production, and by removing this material from the market international prices will increase to fall in-line with current Chinese market prices, which are a still another $30-50 per kilogram above non-Chinese prices.
If speculators are able to secure large amounts of non-Chinese indium, it can be expected that all prices will continue rising.
For now, most large western producers are refusing to offer to speculators, viewing the sudden price increases and market volatility created by investor behavior as negative to the long-term interests of the industry.
Nevertheless, the entrance of Chinese buyers into the international market has sent prices upward.
This is the first time investment schemes in China have come to affect international indium prices and there are many skeptical about the numbers quoted by the Fanya Exchange, which claims to have over 1100MT of indium in its warehouses as of the end of June. Yet, all are treading carefully and waiting to see what happens next.
One area to watch may be Beijing's crackdown on excessive credit that began in the last week of June. This has already had an impact on antimony prices, as factories have had to de-stock, sending prices lower, in order to pay back loans called in by the banks.
So far this has not slowed the indium speculators, but is something to keep an eye on in the coming weeks.
Image courtesy of Metal-pages.com
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