High-grade fluorite prices expected to rise through 2020

7th August 2013

By: Henry Lazenby

Creamer Media Deputy Editor: North America


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TORONTO ( – The average yearly price for high-grade fluorspar, or acidspar as it is also known, is expected to rise by 16% through to 2020 as demand grows, tempered in the medium term by new supplies, market analysts Byron Capital Markets said in a recent report.

The analysts’ report, titled ‘Introduction to fluorspar and an acidspar price deck’ had concluded that the expected average yearly price for acidspar would reach $441/t by 2020, assuming at least four new producers entered the market during this time, and the largest acidspar producer, Mexichem’s output increased. Current prices hovered at about $380/t.

“We fully expect additional producers to be attracted by those increasing prices in 2016 and beyond, but we also fully expect the market to remain robust and profitable,” clean technologies and materials analyst and report coauthor Jon Hykawy said.

He added that, barring a near-term economic collapse, or a serious situation developing within either global steel or aluminium industries, there would be no reason for acidspar prices to fall back to the price levels seen during the global financial crisis.

“For various reasons, spot prices for acidspar are higher than the contract prices we have analysed and these price levels are easily sufficient to maintain industry profitability,” Hykawy said.

Fluorspar, also known as fluorite, is a mineral composed mainly of calcium fluoride (CaF2). It is generally categorised by CaF2 content as either metallurgical grade (60% to 85%), ceramic grade (85% to 96%) or acid grade (97%+). Acidspar is the highest-grade form of fluorspar and has the highest indirect use in downstream industries.

The analysts explained that fluorspar is the dominant source for the chemical element fluorine (F), and owing to F’s extreme chemical properties, it was largely irreplaceable in its use. These uses include steel pickling, aluminium smelting, fluoropolymers and fluorochemicals, making fluorspar critical to driving economic growth in the future.

Fluorite is a widely occurring mineral, which is found in large deposits in many areas. Notable deposits occur in China, Germany, Austria, Switzerland, England, Norway, Mexico, and both the provinces of Ontario and Newfoundland and Labrador, in Canada, with the largest deposits being in South Africa.

The report highlighted the steel and aluminium industry’s demand as being the highest for the chemical. The World Steel Association recently noted that steel production grew only 1.2% in 2012, and the organisation predicted that growth would be 2.9% in 2013 and 3.2% in 2014, with a long-term compound annual growth rate of 4.4% through to 2020.

In the fluoropolymer and fluorochemical industry, several authors had estimated growth rates that correspond to levels of more than 50% above the average global gross domestic product (GDP) growth rate of about 2.35% for 2006 to 2011.

The analysts said the limited available data on this supported the conjecture, and added that they would assume a conservative growth level for this use of about 150% of the global GDP to 2020.

For industries using fluorine in advanced refrigerants, the analysts predicted demand would essentially grow at the same rate as global GDP, at least - despite the growing use of alternative refrigerants - based on available data from 2004 to the present day. “We conservatively extend this growth through 2020.”

The World Bank had estimated the world GDP to grow by about 3% through to 2020.

On the supply side, the report quoted US Geological Survey data showing that China was, in 2010, responsible for producing about 3.3-million tonnes of fluorspar. Looking forward at the current producers, the largest, and the one with the most clearly stated expansion plans, was Mexichem.

In 2010, Mexichem was producing roughly 600 000 t/y of acidspar and, in the fall of 2012, announced plans to expand production to 1.2-million tonnes a year, through acquiring existing mines and organic growth.

Byron Capital said it believed that only about 400 000 t/y of Mexichem’s expected 1.2-million tonnes a year would be new production, starting from 2014 and, despite having the lowest production costs in the industry, the company had also stated that it intended to produce downstream products and would not sell its acidspar.

How well this new capacity would be absorbed by the existing market was thus debatable, but the analysts expected the company would consume all of its new production.

Edited by Creamer Media Reporter


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