Zirconium prices extend rally as market tightens

: Metals
21/06/24

Zirconium silicate prices have climbed to eight-year highs as rising demand and disruptions to zircon output are tightening the market, with prices expected to continue increasing.

The price range for 65pc-grade zirconium silicate was assessed this week at 15,000-15,500 yuan/t ($2,318-2,395/t) on an ex-works China basis, up from Yn14,500-15,000/t in the previous assessment on 15 June and its highest level since December 2012. Prices have climbed in five of the past seven weeks.

The market for 65pc-grade zircon sand produced in Hainan, China, has been climbing steadily since March. It was last assessed at Yn11,500-12,000/t on 22 June, from Yn10,900-11,500/t on 15 June and Yn8,800-9,300/t in mid-March.

The rapid return of Chinese tile manufacturers — the largest consumers of zirconium silicate — shortly after the Chinese lunar new year holiday and the recovery of other markets following the Covid-19 outbreak have contributed to a strong uptick in demand this year.

Sales of zircon in the first quarter were stronger than usual for the period, which is usually weak, according to Australia-based producer Iluka. US firm Tronox reported a 91pc increase in zircon sales in the first quarter, outpacing expectations and reducing its inventory, it said but did not disclose the volume.

Chinese demand for domestic tiles has risen on increased construction activity. Urbanisation and a growing middle class in other Asian economies has further lifted demand for tile flooring. In the US and Europe, industrial machinery and advanced manufacturing processes have boosted refractory demand. Europe's tile exports have increased to meet demand in many markets fuelled by renovation activity and supply gaps caused by China's anti-dumping and trade restrictions, Iluka said in a recent update.

Global zircon production fell to 1mn t last year, from 1.2mn t in 2019, as producers initially cut output on declining prices and expectations of low demand. Limited new supply is expected to come on line in the next few years, as zircon grades are declining at the major mines. And there are few new projects with substantial volumes in the pipeline, and those that emerge will face technical and geopolitical challenges.

Supply has been disrupted at UK-Australian mining company Rio Tinto's mineral sands operation in Richard's Bay, South Africa, with the firm abandoning a $500mn expansion project in response to violent protests that have damaged equipment. There is also a possibility that the company could close the mine entirely in the future.

Iluka last month said it will temporarily suspend operations at its Sierra Rutile unit in Sierra Leone from 19 November, as low productivity and high costs have made production unsustainable. The company will also evaluate the feasibility of continuing the development of its nearby Sembehun project. The firm produced only 6,600t of zircon in Sierra Leone last year, all of it during the fourth quarter. Its total zircon production last year fell by 42.5pc, to 185,000t.

Zircon producers have raised their prices in response to the tightening market. Ireland-based Kenmare Resources reported higher second-quarter prices on low inventories and Australia's Base Resources reported a "significant" price increase for June-quarter contracts. Iluka boosted its price for standard and premium zircon by $70/t from April this year, and it is set to raise the price further.

Australia's PYX Resources, which produces premium zircon in Indonesia, has hiked its price for the third time this year, by $210/t to $1,750/t for July shipments, representing a total increase of $355/t so far this year. This latest increase reflects South Africa's continued supply issues and China's low inventory, which has triggered a lack of premium zircon supply globally, the company said. Australian sales of heavy mineral concentrate to China have further weighed on the availability of premium zircon in the market, lifting demand from PYX's customers. And Indonesia's zircon prices have reached their highest level since 2013.

Meanwhile, the global shift to renewable energy is raising demand for premium zircon for fused zirconia and other products that cannot use standard zircon. Demand for fused zirconia remains robust in China for use in special refractories for solar and medical glass and US producers are reporting order growth. The price range for fused zirconia was last assessed at Yn30,500-31,500/t on 22 June, up from Yn29,500-30,000/t a week earlier, and its highest level since March 2019.

PYX expects zircon prices to remain high in the medium-to-long term as supply continues to tighten.

Ukraine is auctioning state-owned United Mining and Chemical (UMCC) in July, at a time that will enable it to capitalise on the strength of the zircon and titanium markets. The starting price for the auction is 3.7bn Ukrainian hryvnia ($134.4mn). UMCC, Europe's only zircon mining firm, has the advantage of being able to deliver to customers in Europe within days rather than the 30-day delivery times offered by suppliers in Asia-Pacific, Africa and North America.

By Nicole Willing

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25/05/14

Bolivian president bypasses reelection

Montevideo, 14 May (Argus) — Bolivian president Luis Arce will not run for a second five-year term and instead backed a united front to elect another leftist candidate. Arce's decision on Tuesday came on the eve of the filing deadline for the 17 August election. He called on former president Evo Morales to also step aside from the race to improve the chances of another left-wing contender. Morales is fighting a court ruling that he is ineligible to run after already having multiple terms. Arce said the Movement to Socialism (MAS) party should rally behind senate president Andronico Rodriguez, 36. Rodriguez announced his candidacy on 3 May as a third way, but remains closely aligned with Morales. He has led the senate since 2020. Four center-right candidates are expected to compete in the race. The MAS has governed Bolivia for most of the past 20 years. Arce and Morales, allies turned enemies, blame each other for Bolivia's economic turmoil, including its dwindling oil and natural gas production. Inflation through April was 5.5pc, up from 1.3pc in the same period last year. Inflation was 9.9pc last year, the highest since 2008. The World Bank forecasts GDP growth at 1.4pc for the year. The oil and gas sector is at the heart of the crisis. Bolivia has gone from fuel independence to importing 54pc of gasoline and 86pc of diesel, both of which are heavily subsidized. The government forecast $2.9bn on fuel subsidies this year. Crude production was close to 21,000 b/d in 2024, according to the statistics agency. It was approximately 51,000 b/d in 2014. Natural gas output, the cornerstone of Bolivia's economic growth for most of this century, has fallen. Output was approximately 33mn m³/d in 2024, down from a peak of 56mn m³/d in 2006. Proven reserves were at 4.5 trillion cf in 2023, less than half of the 10.7 trillion reported in 2017, according to the state-owned YPFB. YPFB in early May announced a new tender to certify reserves by the end of this year. Bolivia stopped daily piped gas exports to Argentina in September and has a contract to export up to 20mn m³/d to Brazil. Domestic demand for gas is close to 14mn m³/d, stated YPFB. On 1 April Argentina began using Bolivia's pipeline infrastructure to ship natural gas to Brazil. Three companies — Argentina's Pluspetrol and Tecpetrol, and France's TotalEnergies — have so far sent gas to Brazil. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Rio Tinto sells first PBF cargo with new specification

25/05/14

Rio Tinto sells first PBF cargo with new specification

Sydney, 14 May (Argus) — UK-Australian metal producer Rio Tinto on 13 May sold its first cargo of Pilbara Blend Fines (PBF) iron ore with a revised iron content specification of 60.8pc. Years of grade challenges have led to declining volumes of the blended product, which previously contained 61.6pc Fe. Rio Tinto continues to review product strategy, based on consumer needs and available ore grades, the company told Argus on 13 May. It has notified consumers of Pilbara Blend specification changes and is engaging with them, a spokesperson added. Over the past year, market participants have reported rising volumes of the company's SP10 blend — which has a lower iron ore content, but higher alumina and phosphorus levels, than PBF — being sold into China's portside market to maintain the grade of its PBF product. The reduction in grade in PBF is expected to result in greater volumes of its flagship product being available. Rio Tinto said the average realised fob price from its Australian assets was $97.40/dmt last year — slightly below Argus ' average 2024 iron ore fines 62pc Fe (ICX) fob Australia netback of $98.46/dmt. Rio Tinto's realised fob price includes fines and lump products from across Western Australia. These include lower-grade products and the more-valuable lump, which accounts for about 30pc of total sales over most quarters. Rio Tinto is not the only company facing grade challenges. Typical grades for Australia's BHP have also been steadily declining over recent years, and ores typically deliver below 62pc Fe. Mineral Resources' average ore grade at its 10mn t/yr Pilbara Hub complex was 57.3pc in July 2024-March 2025, down from 58.2pc a year earlier. Argus ' iron ore fines 62pc Fe (ICX) cfr Qingdao price was assessed at $102.40/dmt today, down from $98.95/dmt on 14 April. Rio Tinto's revised PBF product with July delivery traded at $96.41/dmt. Argus plans to launch an assessment for 61pc Fe iron ore fines next month to reflect the ongoing decline in average grades in Australia's Pilbara region. The new price will be calculated from the same underlying spot data as the existing ICX 62pc Fe benchmark. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mauritania weaves GTA project into industrial strategy

25/05/14

Mauritania weaves GTA project into industrial strategy

Paris, 14 May (Argus) — Offshore gas production could help to meet Mauritania's power demand by 2030 while also supporting mining activity, particularly of iron ore, energy minister Mohammed Ould Khaled told the Invest in African Energy forum today. BP last month loaded the first LNG shipment from its 2.7mn t/yr Greater Tortue Ahmeyim (GTA) joint venture in Mauritanian and Senegalese waters. GTA is export-oriented, but Mauritania could still tap the project for power, Khaled said, although he added that infrastructure would need to be built to facilitate this. A tender to build a power plant fired by GTA gas will be launched in the next couple of weeks, he said. Mauritania wants to become a regional power hub within 20 years, Khaled said, and hopes to see construction of a power link "to the north" — in the direction of Western Sahara/Morocco. The Mauritanian power grid is already connected to Senegal and Mali, he said. Future power generation projects will be funded by the private sector and incentivised through tax breaks, Khaled said, with 550MW set to become available to the domestic market through private-sector projects over the next couple of years. Mauritania is also looking for partners to develop the 50 trillion-60 trillion ft³ Bir Allah gas field for export and domestic markets. The area lies 50km north of GTA and exclusively in Mauritanian waters, according to Khaled, with two wells already having been sunk. Bir Allah is "three times bigger than GTA", he said. BP and Kosmos Energy signed an exploration and production-sharing agreement for the site in late 2022 , with BP saying gas from the field will be used to expand GTA to 10mn t/yr. It is unclear whether BP or Kosmos Energy are still partners in the Bir Allah development project. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Quotas most likely option for DRC cobalt export restart

25/05/14

Quotas most likely option for DRC cobalt export restart

London, 14 May (Argus) — The resumption of cobalt exports from the Democratic Republic of Congo (DRC) under a quota system appears almost inevitable, market participants said ahead of the Cobalt Institute's annual conference in Singapore this week. With cobalt prices rising and stocks tightening globally, market participants increasingly expect that the DRC's blanket cobalt export ban — implemented in late February — will transition into a more sustainable quota system. The current freeze has pushed up global cobalt prices, but also blocked the flow of royalties to the Congolese treasury, creating what several traders described as a politically deliberate but ultimately transitional phase. "This is not [Congolese trading and mining firm] Gecamines — it's Kinshasa, it's the ministry of mines, and ultimately it's the presidency," one trader said, emphasising the centralised nature of the decision-making this time around. The government's key grievance is financial, multiple sources agreed. Cobalt royalty revenues have collapsed in recent years, according to several market participants. "They've lost billions," said one source with direct links to the ministry of mines. "This only makes sense if they replace the ban with something dynamic that keeps prices up and restarts the royalty flow." Prices up, revenues frozen Prices for cobalt hydroxide have nearly doubled since February, from $6/lb cif China to close to $12/lb — a sharper jump than during than any previous bans on DRC exports, including the ban on Chinese producer CMOC's Tenke Fungerume mine in 2022, now the largest cobalt mine in the world ( see graph ). But with exports halted, the Congolese government has reaped none of the upside. "They got the prices up, sure — but right now, there's nothing coming in. No exports mean no royalties," one trader noted, "A quota is the only real way forward." Market participants expect any such quota regime to be modelled loosely on Opec, with the DRC restricting supplies in a co-ordinated way to support pricing. "The officials running this are oil and gas guys," one source who has met with the DRC delegation said. "They want Opec on steroids. They've said that outright." Others draw comparisons with Indonesia, which already operates a quota system for its nickel ore mining permits and mixed-hydroxide-precipitate (MHP), which contains cobalt. "Indonesian quotas are real, but they're built into nickel flows. It's not exactly apples to apples," a trader said. "So for Indonesia to reduce cobalt output, they'd have to reduce nickel output, which they don't want to do." Stockpiles thinning, squeeze ahead Record-high first-quarter cobalt hydroxide production by CMOC and global trafing and mining firm Glencore — at 30,000t and 9,500t, respectively — suggests a healthier supply picture than is really the case. "Production hasn't stopped, but that's the point — if exports don't resume, stocks will just build up inside the DRC or dry up abroad," a trader said. Some estimates place global cobalt hydroxide inventories at 50,000–70,000t, but availability depends heavily on who holds what. "20,000t with a larger producer is not the same as 20,000t with a small recycler," one trader said. "Some are more inclined to sit on it and wait for prices to jump." Multiple participants expect a squeeze to emerge in the international market by August, as final pre-ban shipments are consumed and no new material enters the pipeline. "One producer told people there'd be no more shipments after May/June," one source with direct knowledge of trading flows said. "That means by July, China is chewing through remaining stocks — and by August, you're in crunch territory." Some traders are already stockpiling, with exporters deliberately delaying cargoes to benefit from rising prices, market participants said. Strong enforcement The DRC's export restrictions are being heavily enforced. A customs brigade with military backing was deployed recently to Kasumbalesa on the DRC-Zambia border — the country's only significant cobalt export route — to prevent smuggling and enforce the ban. "People writing about illegal smuggling clearly haven't been to Katanga. There's one road. One crossing. It's tightly controlled," a trader told Argus . The new level of sophistication, some argue, is why a transition to quotas feels inevitable. "Extending the ban helps no one in the long term — not the DRC, not Chinese refiners, not the market," an industry consultant said. "A quota system is the only option that gives them both price and payment." Market sentiment remained mixed ahead of next week's conference, with cobalt spot trading thin, ranging from $15-16/lb in-warehouse Rotterdam for Chinese material, $17-18/lb for western standard grade and $19-20/lb for alloy grade. Whether the announcement comes in Singapore or in the weeks that follow, few now doubt the final outcome. "This [export ban] isn't a one-off," one participant said. "It's the start of a new model. The days of Congo flooding the market and watching others profit are over." By Chris Welch Cobalt prices post-DRC supply shocks pc Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Indonesian cobalt output capacity to double by 2027

25/05/14

Indonesian cobalt output capacity to double by 2027

Singapore, 14 May (Argus) — Indonesian cobalt production capacity from its high-pressure acid leach (HPAL) operations will more than double to 114,000t in 2027 from 55,000t in 2024, National Economic Council member and executive secretary Septian Hario Seto has said. But there will probably not be significant capacity expansion beyond 2027, Seto told the Cobalt Congress 2025 conference on 14 May in Singapore. Xu Aidong, cobalt branch chief expert and adviser at the China Nonferrous Metals Industry Association, agreed that capacity will probably stick given slower-than-expected nickel consumption growth and rising costs for HPAL projects that include increasing sulphur prices used in hydrometallurgical production lines. Seto expects cobalt prices to trend up further if the Democratic Republic of Congo's (DRC) cobalt export ban continues but warned that the measure could backfire as it could prompt technology adaptation to lower the cobalt content in batteries. "I think we [saw] in 2017 and 2018 [that the battery sector] responded with massive adoption of the [nickel-cobalt-manganese] NCM 811, so you are compromising long-term demand of cobalt with this one," Seto said. Mixed hydroxide precipitate (MHP) production in Indonesia is still able to generate 30-40pc profit margins even with nickel prices around $15,000/t, Seto added, attributing that partly to the cobalt content. The country exported almost 1.56mn t of MHP last year, with cobalt exports up to around 44,350t. Indonesia previously separated the MHP before further processing into nickel sulphate and cobalt sulphate. "But nowadays, we directly ship the MHP and there is one factory in Indonesia that can process further the MHP going into the precursor without doing the crystallisation of the nickel sulphate," Seto said. "As long as we are increasing the MHP production in Indonesia, it's not possible to [be asked] to control this cobalt," Seto said, adding that the country does not see cobalt as an "independent mineral" but one closely intertwined with nickel. Indonesia's position on nickel is very similar to the DRC's position on cobalt, said Seto, where the biggest producer has to be "careful" and "responsible" in ensuring sufficient supply in the market or risk being treated as "not reliable". A DRC decision on whether to extend the export ban or impose a strict limitation of exports "in part" has yet to be made . The country's mineral markets regulator Arecoms said during the conference that it will communicate its decision as planned at the end of the cobalt export suspension period, at odds with Chinese market participants' expectations for the conference. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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