Several high-temperature minor metal markets are emerging from a volatile few months, with hafnium and molybdenum prices surging as supply constraints bite, while niobium and tantalum navigate a more gradual uptrend. Christina Belda at Argus Non-Ferrous Markets shares February’s high-temp metal markets roundup.
Several high-temperature minor metal markets are emerging from a volatile few months, with hafnium and molybdenum prices surging as supply constraints bite, while niobium and tantalum navigate a more gradual uptrend.
Hafnium rally pauses, but no downside in sight
Hafnium prices soared in recent months as demand from the aerospace, industrial gas turbine and semiconductor industries outpaced supply. Argus‘ assessment for 99pc hafnium with 1pc zirconium stood at $5,000-5,200/kg in-warehouse Rotterdam on 14 February — the highest since its launch in 2015, and up from just over $1,500/kg in-warehouse Rotterdam a year ago.
And while the rally has stalled in February, no downward correction is in sight and consumers have had to adapt.
“The initial shock is over,” a supplier said. “It hasn’t turned into a disaster,” he added, although the structural deficit is by no means resolved. “There was a lot of activity at the end of the year. Consumers were scrambling for material… now most of them are covered for the short term, but there are still gaps to be filled.”
The [hafnium] price is relatively stable at the moment, but this is mainly due to end-users buying at these high prices in order to be covered for the next month or two and waiting for market development — not because there is no interest,” a trader said.
Some downstream users have been booking in advance, including for material recently bought from China for delivery in July. And with availability constrained, the volume changing hands can be sizeable, with one end-user recently buying over 5,000kg on the spot market.
The global hafnium market is likely to remain unbalanced for some time. Shipments from China seem to have stalled and French producers are sold out for the time being. And the emergence of new technologies and applications — from electronics to aerospace — has expanded the demand base for the long term. Countries including South Korea have recently been seeking hafnium for satellite applications, while Japanese buyers are chasing significant volumes for superalloy applications this year, sources told Argus.
Looking ahead, demand is only likely to rise further. Hafnium demand from the nuclear industry is projected to increase at a rate of 4pc/yr, while demand in aerospace superalloys is set to grow by 3.6pc/yr and demand in non-aerospace superalloys by 5pc/yr, according to Europe’s Critical Raw Materials Alliance.
Extreme volatility hits molybdenum market
With the initial price surge on hafnium slowing, market participants are now dealing with another supply-related “shock” — extreme volatility across the global molybdenum complex.
European prices for molybdenum ingots have hit fresh highs this year, with Argus‘ assessment climbing to $97-105/kg in-warehouse Rotterdam on 14 February — its highest since Argus launched the assessment in 2019. The rise has been aggravated by a shortage of molybdenum oxide, the raw material for ingots.
“For both hafnium and molybdenum, there is a problem on the supply side, and there is a fair amount of demand on superalloys and industrial gas turbines,” a trader said.
Some molybdenum traders are taking a “wait and see” approach — partly because of volatility, but also because of prohibitively high costs. It is becoming more difficult to secure insurance and financing, and lending conditions are also sensitive to changes in interest rates.
“People stopped buying because of the financial costs,” another trader said. “You need to have access to the money — it takes a lot of capital to book material. He added that only large trading firms can book full truckloads at present. “One truckload is $1mn in financing. With an interest rate of 7pc, it’s a lot of risk — who can afford that?”
Buying appetite is strong — in China and Europe. In fact, China’s exports of molybdenum products, such as ferro-molybdenum, fell in 2022 because of firmer domestic demand.
Shipping delays continue to cause disruption on some routes, scuppering plans to avoid problems by booking in advance and triggering urgent spot purchases. “We bought cheap material last year, yes, but at a loss already because it hasn’t arrived and we needed to replace it,” another trader said.
Despite record molybdenum prices, end-users are not showing much resistance. Some are temporarily buffered from spot fluctuations because they have long-term contracts at fixed prices.
So are these higher prices the new normal? “Certain things were too cheap for too long, like hafnium,” the first trader said. But there is a growing consensus that molybdenum is headed for a downward correction in the coming months.
Niobium, tantalum prices on the rise
Elsewhere in the high-temp suite, niobium and tantalum metal prices have been gaining since January — albeit more gradually than hafnium and molybdenum values.
Niobium ingot prices have received a boost from fresh buying interest. “There is quite a bit of emphasis on niobium,” a supplier said. At the time of publication, offers from China have risen to $80/kg and above on firm demand. Argus‘ monthly assessment for niobium ingots in-warehouse Rotterdam was most recently at $83-86/kg on 1 February.
Shipments from China have stalled. “If China is less interested in shipping into Europe, then it creates more pressure to rely on niobium scrap,” the same supplier said.
In Europe, buyers and traders have seen an uptick in spot offers from Chinese tantalum suppliers, which were targeting up to $380/kg in January, against $300-310/kg late last year. Argus assessed tantalum metal prices in Europe at $375-380/kg du Rotterdam on 16 February — down from last year’s peak of around $400/kg in June-September, but still up from a multi-year low of just under $250/kg in January 2021.
But market participants do not expect a major tantalum supply crunch to emerge. “There is a decent amount of tantalum demand in China, but nothing crazy. The tantalum supply chain is a bit different because there is a lot of scrap available and recycling, and there are more producers,” a trader said.
By Cristina Belda
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