The tone among presenters and delegates at this year's Argus Metal Pages China Metals Week (held November 17-19th in Guangzhou, China) was the most subdued since 2009.
With minor metal prices following the trend of base metals and other commodities over the past twelve months - touching five to ten year lows - there was not much for delegates to be optimistic about.
Most agreed that the uncertainty that hangs over the indium market as a result of the Fanya Metal Exchange's implosion will not disappear anytime soon. This drag will likely continue so long as the 3600 metric tonnes of indium that Fanya purports to have sitting in warehouses remains embroiled in a feud between investors and the Exchange.
The Yunnan provincial government authority tasked with investigating Fanya's activities has, itself, already stated that the investigation could take some time.
Indium, however, is by no means the only minor metal feeling downward price pressure. Over the past six months, prices for bismuth, tellurium, gallium, tungsten and others - metals that were deemed by many to be in critical shortage just a few years ago - have all seen significant declines as a result of excess supply.
Two metals that have held relatively strong against this onslaught have been germanium and cobalt.
Yet, even with its small and tightly controlled market, germanium has seen prices fall by ten to twenty percent this year. Cobalt prices, in contrast, have bounced up and down as a result of the temporary closure of the Chambishi copper and cobalt mine earlier this year.
The good news is that there is little room for prices to fall further, which should lead to some more stability in 2016. Production cutbacks, both at the base metal level (zinc, lead and copper mines), as well as by minor metal refiners, will likely help to firm up prices in the coming months.
Also, as opposed to what we saw in the wake of the 2009 financial crisis, overall market demand has been resilient. However, in an environment of oversupply and falling prices, there has been little incentive for consumers of these metals to purchase more than their immediate requirements demand. As prices stabilize, it is likely that we will see more companies willing to take on more inventory at the currently low price levels.
For now, though, the market remains quiet, with material and offers aplenty.
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