Fluorspar will see growing demand over the next decade, despite some applications facing more immediate challenges due to environmental legislation and more limited economic growth prevailing in some of the major developing economies. New fluorspar production capacity and expansions should boost supply over the next five years to meet growing consumption levels, according to a new report from Roskill.
The influence of China, and more recently Mexico, has changed the landscape of international fluorspar markets over the last twenty years. A combination of rising production costs and an increase in Chinese domestic consumption has reduced the volumes of acid-grade fluorspar (acidspar) available for export, however. This has opened the door for producers in other countries.
China still the largest supplier, but Mexico has grown fastest
Overall, world fluorspar production is rising, and reached 6.2Mt in 2012, up from 4.2Mt a decade ago. This latest report from Roskill details how China is still the largest fluorspar producer, accounting for nearly 3.4Mt in 2012, or just over half of global output. Mexican supply has increased by 63% over the last decade and it is now the leading exporter to the international market, with further expansions planned by leading fluorspar producer, Mexichem. Over the same period, European production has declined from 350,000t to 220,000t, although a UK operation, British Fluorspar, will restart in 2013 and boost supply in the region.
Production is broadly split into two grades, acidspar and metallurgical grade (metspar) which serve different markets. Global acidspar production increased by nearly 3%py between 2003 and 2012, while metspar increased by almost 5%py. Potential additional acidspar production capacity totalling 1.6Mtpy is planned over the next five years, with projects in Canada, South Africa and Vietnam the most advanced.
New Chinese trade patterns emerge after domestic added-value drive
Domestic fluorspar consumption in China has risen by almost 12%py since 2003, which has seen the world’s number one producer beginning to import more metspar over the last five years, mainly from Mongolia. Chinese acidspar exports have also plummeted since 2000, dropping from 1.28Mt to 443,000t in 2012, as domestic consumption grew. In early 2011, the Chinese government removed export quotas from fluorspar, and in early 2013 abolished the export tax. The decline in exports of acidspar from China has been partially offset by increased exports of HF, AlF3 and fluorocarbons as the Chinese move away from exporting raw materials.
Aluminium fluoride boosting acidspar demand as fluorochemicals struggle
One of the main markets for acidspar is the manufacture of hydrogen fluoride, which is the starting point for nearly all fluorine chemicals. This sector has been challenged by regulation, and the phasing out of fluorine compounds, but is still expected to remain a key driver for acidspar demand with a moderate growth rate forecast over the next ten years.
Acidspar is also used to produce aluminium fluoride, consumed almost exclusively in primary aluminium production. World production of aluminium has shown strong growth, centred in China and Asia, reflecting the shift in production to areas with accessible low-cost energy and growing domestic markets. China became the world’s largest aluminium producer in 2002 at 4.3Mt (16% of the world total). In 2012, this had risen to 20.3Mt (44% of the world total), accounting for the 5.5%py increase in domestic aluminium fluoride consumption over the same period.
In 2013, the primary aluminium industry is stretched by rising production costs and low prices. Despite this present malaise, the outlook for the aluminium industry is positive with rising consumption growth through to 2020, mostly due to increased industrialisation and urbanisation in emerging economies.
Weaker steel market outlook to impact metspar growth
The fortunes of the metspar market are inextricably linked to the health of the global steel industry, which is its main application. Despite the fact that the addition rate of metspar as a flux has been declining in recent years, Roskill is forecasting long term growth in consumption based on continued expansion in steel output, but at lower levels than witnessed over the last decade. Currently metspar accounts for around 38% of total fluorspar supply, a proportion that has remained relatively steady over the last ten years.
Price falls mirror recent softening in demand but some recovery anticipated
Acidspar prices climbed fairly swiftly in 2011, then peaked in 2012 before declining towards the end of the year and into the first quarter of 2013. Average Chinese FOB prices in the first quarter of 2013 were US$331/t, down from an average level in 2011 of US$439/t. Acidspar prices are expected to recover some of their lost ground long-term, but will remain under downward pressure in the short-term on weak demand.
Fluorspar: Global industry markets and outlook, 11th Edition, 2013 is available at an introductory price of £3230 / US$5185 / €4080 from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND. Tel: +44 20 8417 0087. Fax +44 20 8417 1308, Email: info@roskill.co.uk, Web: http://www.roskill.com/fluorspar
Note to editors
Roskill Information Services Ltd. of London, UK is a leading provider of multi-client and bespoke market research services to the minerals and metals industry.
The new Fluorspar report contains 262 pages, 198 tables and 67 figures plus an appendix of international trade statistics. It provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyses consumption, trade and prices.
For further information on this report, please contact Alison Saxby, asaxby@roskill.co.uk or +44(0)20-8417-0087. To be added to our press distribution list, please contact Pedro Palma, Pedro@roskill.co.uk.
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