Niobium concentrate prices rose sharply in 2017, increasing by over 60% during the year to finish at US$16/lb Nb2O5. No new records were set but the movement in prices indicates a reversal of the downward trend since 2012, when levels of over US$20/lb Nb2O5 occurred. Much of the increase was down to a strong recovery in tantalum concentrate prices, which grew by 70% to US$88/lb Ta2O5, after bottoming-out in late 2016.
Niobium concentrate prices tend to mirror those for tantalum concentrates because the two contain both metals. Tantalum is the main driver of prices, in Roskill's opinion. The relationship is not apparent during Q1 2018, although that is normal because it does fluctuate over short periods. Published niobium concentrate prices have remained at US$16/lb, as of mid-March 2018, while tantalum concentrate prices have risen to US$93/lb.
In Roskill's baseline forecast, niobium concentrate prices will not pass US$20/lb through to 2027. Growing availability (a flood) of relatively low-cost by-product tantalum from lithium mining may moderate prices of tantalum concentrates, which would carry over into niobium concentrate prices.
Ferroniobium prices do not generally move sharply; producers mostly set them. From levels of over US$40/kg contained Nb between 2011 and 2015, prices fell in most markets in 2016, partly because of the strengthening US$, and remained in the low- to mid-30s in 2017. The expanding supply base for ferroniobium will preclude any sharp increases in prices, although some growth could come from higher prices of ferrovanadium, for which ferroniobium is a viable substitute in some steel applications.
Some industry observers have been of the view that sharply rising ferrovanadium prices, which have resulted in some growth in ferroniobium consumption, could lead to an increase in ferroniobium prices. There is little clear evidence that this is happening. Unit values of CBMM's exports stayed within a dollar or so of US$30/kg throughout 2017 and in the first two months of 2018. European market prices firmed from US$31/kg at the start of 2017 to US$36/kg in Q2, a level that has been constant since then. The unit value of US imports from Brazil and Canada has fluctuated in the US$30-35/kg range, while Chinese import values have moved little either side of US$30/kg.
Roskill does not expect ferroniobium prices to rise above US$/40kg Nb (in nominal terms) before 2024, although steelmakers are anticipating an increase during 2018. As supply contracts are typically of one year, it will take some time for higher prices to become apparent in trade statistics.
Ferroniobium production capacity at existing producers was an estimated 98ktpy Nb in 2017 and could increase to 118ktpy in 2018. A number of projects are in the pipeline and Roskill's baseline forecast envisages total capacity in 2027 at possibly 133ktpy. Global production capacity is, and will remain, comfortably in excess of demand, which Roskill forecasts at 74kt (baseline) in 2027. There is good potential for greater consumption of ferroniobium in China, where there is a move towards increased use of high-strength (HSLA) steels, many of which contain it.
There is considerable untapped demand for ferroniobium. In 2017, Roskill estimates that world production of crude steel was 1.63Bn tonnes. Of that, only a small percentage was HSLA steel (not all types of which contain ferroniobium). Given that the addition of ferroniobium to steel confers major performance and cost benefits, at the same time as being a minor component of total cost, it is reasonable to expect HSLA usage to grow, particularly in countries where intensity of ferroniobium use is well below the world average. Demand for ferroniobium is not going to fall over time; it can only increase.
Roskill's Niobium - Global Industry, Markets & Outlook report was published in February 2018. Now in its 14th edition, the report is essential reading for the niobium industry.
