Strategic Metal Report

Misappropriation of Over US$100 Million Linked to Vital Materials Co. Chairman Zhu Shihui

Nearly five years after the Fanya Metal Exchange halted trading in 2015, the last of the stockpile of minor metals amassed by Fanya were finally auctioned off in early 2020. And, so, the book seemed closed on the story of the short-lived Chinese minor metal investment scheme.

But, here we are one year later, and it is beginning to look like there will be more to this story.

On January 10, 2021, a lesser-known, publicly traded Chinese aluminum alloy company (Harbin Zhongfei New Technology Co. Ltd.) released a public statement advising that RMB 831 million (approximately USD 129 million) in company funds had been withdrawn by the company's Actual Controller*, Zhu Shihui, and transferred to companies that he is affiliated with. 

Gallium Market Update - January 2017

The end of 2016 saw gallium prices rise for the first time in five years. Welcome news for refiners who have been selling the metal at decade-low levels. Yet, there are few reasons to believe gallium prices will continue rising through the first quarter of 2017.

Continue reading "Gallium Market Update - January 2017" >

Minor Metals Market Update - December 2015

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. 

By-Product Metals: The Aluminum-Gallium Relationship Pt. II

Now that we understand the importance of the relationship between primary metal production and the extraction of minor metal by-products, we can discuss some of the effects that this relationship has on the supply of gallium.

Driven by demand for electronics, particularly flat panel displays (FPDs) and smart phones, consumption of gallium has grown by an estimated 5 to 10 percent per annum over the past ten years. Yet, over the same period, the market price for 99.99% gallium has fallen roughly 30 percent (based on current market price of USD 290/kg for 4N gallium metal).

Gallium forecasts still predict substantial demand growth over the following three to five years, as the market for FPDs continues to expand. FPDs, such as those found in smart phones and tablet computers,

By-Product Metals: The Aluminum-Gallium Relationship Pt. I

Save for few exceptions, minor metals are produced as by-products during the process of extracting primary, often base, metals. But it is this dynamic between primary and by-product metals, which is at the core of understanding most minor metals markets, that still confounds many analysts, resulting in inaccurate assumptions and misguided conclusions.

In this two-part study, SM Report takes a look at the sometimes complex relationship between primary (or source) metals and by-product (or minor) metals in order to better understand the production and supply of such metals.

As by-products, the supply of most minor metals is heavily dependent on the extraction of source metals and, as a result, the market for the source metal heavily influences the availability of by-product metal. That is because the market for the source metal guides business decisions regarding extraction rates.

But what does this mean? The relationship between gallium and aluminum provides a good example.

Gallium Market Update - December 2012

After gallium prices attempted to wake from their slumber in October, market disinterest forced them back down in November. By the end of the month, prices had returned to the US$ 290-310/kg range (FOB 99.99% min.) where they have been for much of second half of 2012.

The story continues to read the much like it did back in the spring: Significant production capacity increases coming on-line at a time of struggling economic growth have resulted in the lowest spot prices seen in years.

Although forecasts remain optimistic about growing demand from gallium's core markets, electronic wafers and LEDs, so far the market has been unable to digest the roughly 100MT per annum increase in production capacity that has recently become available.

Two questions remain: When will greater demand for gallium materialize? And will producers be able to wait out the storm until it does?

Minor Metal Market Update - October 2012

Strategic purchasing and materials being held from the market have pushed prices for many minor metals higher in recent weeks.

Despite high inventories, tellurium prices rebounded in Q3 after nearly a year of steady decline, in large part due to many high purity refiners refusing new offers.

Germanium prices appear to be stabilizing at the start of Q4 after an unanticipated run-up of nearly 70% since April. The jump in prices spurred buying activity - particularly for germanium dioxide - over the summer months.

Indium prices, meanwhile, have been pushed higher by the Chinese State Reserve Bureau's (SRB) purchases of the metal at above market prices. Purchases by the SRB in the second half of 2012 may end-up accounting for as much as 15% of global production this year.

With large inventories to draw on, whether indium's price gains stick will largely be dependent upon how much purchasing activity is seen in the remaining months of 2012.

High inventories of 99.99% gallium continue to drag on prices for the metal. While offer prices increased slightly in Q3, it may be some time before consumption increases to levels high enough to absorb excess inventories that have built up since new production was brought on-line earlier this year.

Gallium Market Update - March 2012

As gallium prices continue to hover around their lowest level in years, recent reports from China suggest that some factory expansions may be temporarily shelved until prices rebound.

At least one major producer has already opened a second production line - doubling its capacity - in recent months. 

While gallium sales remain fairly strong, spot gallium prices, which have dropped from a high of over US$ 900/kg in mid-2011 to near US$ 400/kg, have fallen in large part due to more mature recovery systems to collect recycleable gallium in Europe and North America and to growing primary production from capacity expansions in Asia.

Image courtesy of Metal-pages.com

Gallium & Indium Prices Reflect Solar Industry Woes

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

Gallium Market Update - April 2011

The gallium market has continued to experience pressure due to increased demand from LED manufacturers since the beginning of 2011. Some producers have seen demand for LED applications double since the same time last year. Many are speculating that increased demand for CIGS photovoltaic cells, following concerns about nuclear energy arising from the situation in Japan, will push gallium prices well above $1000/kg by the mid-point of 2011. There may still be room for gallium to go higher, however, many producers in China already have plans in place to significantly expand production capacity by the start of 2012. According to some calculations, if all the new capacity is completed on time, Chinese gallium production could double to over 100MT in 2012. Even if new production is just half of this, it will help to bring stability back to the market. SMI Ltd. expects gallium prices to peak in the third quarter of 2011.

 

   
Chart courtesy: www.metal-pages.com