Strategic Metal Report

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. 

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.

Evaluating and Valuing Minor Metals: Tellurium

“Tellurium: Nerd’s Gold”, an article recently published on Resourceinvestor.com, examines the potential demand growth for tellurium in contrast with its relatively low natural occurrence. Like many minor metals, the potential demand for tellurium is significant, particularly due to its use in cadmium-telluride solar cells. However, to date, this demand has largely not materialized and global production has kept prices relatively stable.

The article provides an interesting analysis of the applications and potential demand for tellurium, but due to some fundamental mistakes in assessing the supply and demand characteristics of tellurium is misguided in its efforts to value the metal. Investors, analysts and traders must be cautious of such mistakes so as not to under- or over-value their investments.

Coverage from Minor Metals & Rare Earths 2010 - Xiamen, China [Part II: Minor Metals]

A wide range of reports were presented at Metal Pages’ Minor Metals & Rare Earths conference this year, which not only covered a variety of metals, but also included perspectives from privately held and publicly traded producers, exploration and development companies, as well as research organizations.

Two presentations specifically examined the current indium market. Growing use in liquid crystal display (LCD) and cadmium-indium-gallium-selenide (CIGS) photovoltaic applications have attracted much attention to the indium market over the past five years. Feng Yuncong, from the Antaike research group, however, expressed doubt about any large indium price increases in the near future due to the high number of large-scale producers that are capable of extracting at high recovery rates. Claire Mikolajczak, Director of Metals and Chemicals at Indium Corp., discussed the effect of the flat panel display (FPD) industry on indium demand. Currently accounting for about 56 percent of indium demand, according to Ms. Mikolajczak, the FPD market is the primary driver of indium prices. Moreover, although the LCD growth rate is decreasing, it still remains strong and demand for indium continues to be supported by growth in the photovoltaic cell (PV), CIGS and light-emitting diode (LED) industries. Consequently, some estimates have world demand for indium nearly doubling over the next decade. However, despite strong end-use growth estimates, most in the industry believe production can keep pace over the long-term, leaving only temporary periods of price volatility