LME WEEK 2018 – COMMENT: Volatility reigns as minors, ores and alloys markets enter mating season

Supply disruption, strong demand, multi-year prices highs and subsequent supply responses have meant for another year of price swings and volatility across many of the minors metals, ores and ferro-alloys markets.

And now, with LME Week and contract negotiating season coming around again, players must contend with Trump administration tariffs on imports of a number of China produced goods, including selenium and cobalt.

The tariffs took effect late last month at 10% and could increase to 25% from the start of next year.

For those metals not included on the current list of tariffs there remains a concern that they will be added at a later date.

“If it wasn’t already complicated enough, now we’ve got sanctions knocking about as well,” one cobalt trader said.

In the following series of infographics, Fastmarkets MB pricing reporters and analysts provide their data insights and analysis for a number of key minor metals, ores and ferro-alloys markets. They also look at some of the key factors likely to dominate and swing contractual negotiations that will gather pace over the coming weeks.

In the vanadium market, where material is trading at a 13-year high, those negotiations are firmly under way, with consumers trying to lock in their 2019 volumes in a market where there seems to be no quick fix to supply-side tightness.

For tungsten and indium, negotiations provide the opportunity to revisit the possible impact of Fanya stocks, and their potential effect on prices which have staged a recovery since hitting multi-year lows in recent years.

As you would expect, activity in China continues to determine price direction elsewhere in the minors, ores and alloys space. Its crackdown on smuggling has given a lift to antimony prices both domestically and further afield in recent weeks, and environmental inspections lend volatility to the chrome market, as do the currency moves that looks set to keep manganese ore prices unsteady into 2019.

These markets cannot be viewed in isolation. Production cuts at Ningxia Tianyuan have proved bearish for selenium demand, but simultaneously bullish for manganese flakes and ferro-chrome.

And finally, rallying prices and volatility have meant mounting interest in the typically opaque and sometimes illiquid minors, ores and alloys markets. There is probably no better example of that than lithium and cobalt, both of which have seen increasing investor inquiry, demand for supply and interest in hedging instruments as a result of the battery and electric vehicle boom.

With these markets looking likely to continue to make dynamic moves into the fourth quarter and 2019, those calls for transparency show no signs of dying down.

View the infographics here:
LME WEEK 2018 – INFOGRAPHIC: China’s smuggling crackdown to dictate antimony market dynamics
LME WEEK 2018 – INFOGRAPHIC: Slower demand growth weighs on chrome demand but currency moves offer upside
LME WEEK 2018 – INFOGRAPHIC: Cobalt prices fall from multi-year highs but metal tightness persists
LME WEEK 2018 – INFOGRAPHIC: Fanya’s indium stock overhang refuses to subside 
LME WEEK 2018 – INFOGRAPHIC: EV production to dictate pace of lithium supply absorption
LME WEEK 2018 – INFOGRAPHIC: Rand, yuan volatility lends uncertainty to manganese ore 
LME WEEK 2018 – INFOGRAPHIC: Tight supply to keep selenium prices supported but US tariffs add uncertainty
LME WEEK 2018 – INFOGRAPHIC: APT price momentum to accelerate in Q1 as new round of Chinese environmental inspections looms
LME WEEK 2018 – INFOGRAPHIC: Consumers attempt to lock in 2019 supplies after FeV soars through $100/kg