Fluorspar Trade and Prices in 2013 - Simon Moores

Fluorspar in 2013Changing global trade routes and price trends

Simon Moores, Manager, Industrial Minerals Data,

Fluorspar 2013, London

Simon Moores, Manager, Industrial Minerals Data – [email protected]

indmin.com/FluorsparAnalysis

1. Overview – Fluorspar in 2013 2. Existing trade routes and price trends3. The fluorspar highways of the future 4. Other defining factors of 2013

1. Overview – Fluorspar in 2013

The storm is over but the gloom fails to clear…

Acidspar• Demand continues to deteriorate across the

board• As bad if not worse than 2009 • Prices have collapsed from 2011 highs • Prices down 25% on average

Metspar• Global demand sluggish• Demand from China’s steel industry props

up industry & prices • Prices more robust than acidspar

The world in 2013

US government shutdown

Storm in Europe

Smog in China

2. Existing trade routes and price trends

• Trade routes that tells the fluorspar story of 2013

• Price trends from data collected by the new Industrial Minerals Data | Fluorspar


Trade route 1: China to the rest of the world

Situation: A Chinese realignment

• Chinese exports have fallen• China’s export prices = collapsed for both acidspar and metspar• …but metspar imports have increased (Mongolia)

Transport method: Sea freight Delivery terms: FOBProduct traded: Acidspar, Metspar

2012: 25% H1 2013: 18%



Price trend: Metspar, 85% CaF2, FOB China

35%

October 2013: $230‐250/tonne

January 2013: $355‐375/tonne

Source: IM Data | Fluorspar www.indmin.com/FluorsparPrices


Price trend: Acidspar, 97% CaF2, Wet Filtercake, FOB China

25%






Trade route 2: Mongolia to Russia / China

Transport method: Rail Delivery terms: DAPProduct traded: Metspar, Acidspar

Situation: Supplier to China and

• H1 stronger performance than most countries• Propped up by metspar demand from Chinese steel = up 9% y‐o‐y (June 2013)• H2 slowdown, some fluorspar plants closed• 2013 slower than 2012 (420,000 tpa)

• International prices now the lowest in the market • Mining costs on average lower than China • China happy to increase reliance on Mongolia to preserve its domestic resources

The importance of foreign direct investment in Mongolia

Source: Foreign investment and foreign Trade Agency of Mongolia, KPMG


Price trend: Acidspar, 95‐97% CaF2, Dry Filtercake, DAP Mongolia to Russia

17%






Price trend: Metspar, 75% CaF2, DAP, Mongolia to Russia

15%

January 2013: $200/tonne





China’s steel production: record highs in 2013


Trade route 3: Product shipped into Europe

Situation: Demand evaporation

Transport method: Sea freight Delivery terms: CIFProduct traded: Acidspar, Metspar

• Acidspar demand from HF very low• Metspar demand very low, steel production has stalled • Steel production declined 9% in 2012 and 3% in 2013 (est)• China up 9% in 2013 y‐o‐y• Is 2013 the bottom of the market?


Price trend: Acidspar, 97% CaF2, Wet Filtercake, CIF, Rotterdam, Holland

18%


October 2013: $420/tonne


Trade route 3: Product shipped into Europe

3. The fluorspar highways of the future

Future trade route 1: Vietnam to the US

Situation: A new significant producer in 2014

• 200,000 tpa of new acidspar supply• Enters international market in 2013• Primarily to the USA• India? China?

Expected transport method: Sea freight Expected delivery terms: FOBProduct traded: Acidspar


Future trade route 2: Mongolia to China expansion

Situation: Mongolia rising

• China’s reliance on Mongolia as a low‐cost metspar source will increase• Developing new resources will be key

Expected transport method: Rail Expected delivery terms: DAPProduct traded: Metspar

• Transport infrastructure investment critical – roads, rail lines

• Low cost production will cement long term position

Right: Rio Tinto starts to ship copper concentrated from Gobi Desert, Mongolia, June 2013


Future trade route 3: Internal trade routes

Situation: Raw material self‐sufficiency

• Developing captive supplies for countries / consumers• UK & Germany have opened/developing new mines

• UK – re‐opened in Derbyshire• Germany – 2 new acidspar operations in 2014

• 100% reliance on China can no longer be guaranteed• Security in diversity of supply = major issue

Expected transport method: Rail, Truck, BargeExpected delivery terms: DAPProduct traded: Acidspar, Metspar

4. Other defining factors of 2013

• Raw material self sufficiency • Germany

• Increase Acidspar output by 55%• New 30,000 tpa Acidspar

operation by 2014 • UK

• Re‐opening of British Fluorspar mining operation (formerly Glebe Mines/Ineos)

• Global trade slows, imports increase into China

• A switch?• Europe suffering, US only slightly

better, China opportunity• China metspar imports up 25% y‐o‐y

in 2012, H1 2013 up again up 18%

4. Other defining factors of 2013

• Metspar neglected?• Supply replacement needed in China • Most new projects focus on value‐

added Acidspar• Gap in the market for metspar into

China – Mongolia

• Acidspar and metspar price convergence • Price declines across‐the‐board

outlined• Acidspar’s more rapid decline than

metspar, especially in H1 2013• Gap closes between acidspar and

metspar price ($80‐100/tonne)

Shruti Salwan, AnalystLondon [email protected]@ssalwan_indmin

Andy Miller, Junior AnalystLondon [email protected]@amiller_indmin

Albert Li, [email protected]

Recovery delayed until 2014…

Business

Fluorspar Trade and Prices in 2013 - Simon Moores