Niobium: Supply to remain intact
roskill.com
Posted 6th April 2020 in ?Industry news.
By Patrick Stratton
CBMM has announced that it has replenished its warehouses in Europe, Asia and the USA in recent months and holds stocks sufficient to last for three months. The company produced 110kt of niobium last year, exceeding capacity by 10%, and sold 91.3kt, most of it as ferroniobium. Total sales in 2019 were 8.62Bn Reals (US$1.65Bn), up 16.2%, generating a net profit of 2.97Bn Reals (US$0.57Bn). It is also proceeding with a 597M Reals (US$114M) expansion of capacity to 150ktpy, due for completion during 2020.
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With the COVID-19 pandemic causing suspension of mining activity around the world, a market supplied almost entirely by three producers would seem to be highly vulnerable to disruption. This risk appears to be low in the case of ferroniobium, at least for now, and the supply of ferroniobium will stay sufficient to meet demand in the coming months, according to Roskill’s sources. CBMM, in Brazil, accounted for 78% of total ferroniobium production in 2019, followed by CMOC, also in Brazil (10%), and Magris, in Canada (8%). These companies have local captive production of pyrochlore, the mineral used to produce most ferroniobium. This is a considerable advantage, as they are not reliant on imported niobium feedstock (and CBMM, at least, keeps a large amount of aluminium in on-site inventory to safeguard its aluminothermic reduction to FeNb). This contrasts somewhat with the non-steel part of the niobium industry in China and elsewhere, which is constrained by having to import niobium and tantalum concentrates from Africa and South America, the supply of which must now be facing considerable logistical difficulties. Production of ferroniobium for the domestic market in China is also based to a very large extent on imports of niobium and tantalum concentrates.
A potential risk to CBMM is that it is in the state of Minais Gerais, which is currently under a state of emergency. CMOC Brasil in Goias, adjacent to Minas Gerais, has reported that it continues to operate normally and has no plans to suspend its activities. Magris is also unaffected. Although it is in the Saguenay region of Canada’s Québec province, which is under quarantine, mineral extraction and processing are considered to be essential and are exempt from the mandatory closures affecting a large part of the province. Mineração Taboca, also in Brazil, has announced a 15-day suspension at its mine and smelter. It is only a small producer of ferroniobium, but it is a major player in the tantalum industry.
There is no evidence to suggest that the COVID-19 pandemic is having any significant effect on ferroniobium prices. It is business as usual in the ferroniobium industry, reflecting the high degree of stability that has existed for many years.
Roskill will publish the first update to its Niobium: Outlook to 2029, 15th Edition report in April 2020. For access to detailed analysis on supply, demand, trade, prices, cost curves and forecasts for the niobium industry, and to follow the potential impacts of COVID-19 on downstream steel markets and the global economy click here.
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