Tellurium and selenium metal prices fell significantly over the course of 2015, leading a wider slump in minor metals prices as oversupply continued and uncertainty weighed on consumer demand.
European prices for 99.99pc grade tellurium metal fell by 80pc to a range of $20-30/kg on 31 December from $85-105/kg at the start of 2015. Prices in the US and China fell by marginally less, with the market in China down by 73pc to 160-200 yuan/kg ($24.50-30.70/kg) and US prices down by 76pc at $20-40/kg.
After an extended period of stand-off between traders and consumers, prices moved down consistently, as producers eager to offload material in an oversupplied market sought business with consumers already holding significant stocks under long-term supply contracts. A fall in demand from tellurium's key consumer sectors — such as solar power, industrial refrigeration and air and water-cooling technology manufacturing — owing to slowing economic growth in China also took its toll.
Selenium prices fell heavily, with European 99.5pc grade metal down by 71pc to $6-8/lb from $23-25/lb in January and US prices falling by 68pc to $6.75-8.25/lb from $22-25/lb over the same period. Increasing consumer consolidation in the market, particularly in Europe, was a key driver of falling prices over the course of the year as producers and traders lowered offers to secure scarce business. Consumers in the glass manufacturing sector continually bid at low levels, as they ran down inventories and bought only on an as-needed basis to maintain sufficient supply for their immediate production needs.
Selenium dioxide and powder prices in China fell by 70pc on the reduction in import costs and as manganese producers — which use selenium as a feedstock — cut production in response to falling profit margins.
The existence of significant stockpiles affected many metals prices over the course of the year, in particular the reportedly well-stocked warehouses of China's troubled Fanya Metal Exchange. Now under investigation by Chinese authorities, the exchange's inability to meet its financial obligations to its investors pushed down prices for indium and bismuth metal as the market expressed concern about the potential return of warehoused material to the market in the event of potential collapse.
Prices for 99.99pc indium metal fell consistently over 2015 by 68pc in China to Yn1,350-1,500/kg from Yn3,900-4,400/kg at the start of the year and by 66pc in Europe to $220-250/kg from $670-710/kg in January. Prices in the US market were 65pc lower to end the year at parity with the European market, having started the year at a small discount at $640-700/kg. Oversupply and low-demand manufacturing methods such as indium tin oxide (ITO) sputtering techniques compounded the effect of shrinking demand.
Bismuth's wide range of pharmaceutical, cosmetics and alloy applications mitigated this downward pressure to some extent, but US prices still fell by 60pc to $4.10-4.40/lb from $10.50-11/lb, with European prices down by 58pc to $4.40-4.70/lb at year-end from $10.60-11.20/lb at the start of January. The Chinese market ended the year 55pc lower at Yn57,000-59,000/t from Yn122,000-124,000/t at the start of January, with producers beginning to resist lower prices at the end of the year on tight profit margins.
Conversely, prices for lithium cobalt oxide ended the year up by 5pc, rising to a range of Yn173-178/kg ex-works China for 60pc grade material at the end of December from Yn165-170/kg at the start of the year.
Lithium prices have been rising with increased demand for batteries for electric vehicles and energy storage competing with consumption in the glass and ceramics industries for limited supply. With the growing demand from the clean energy industry expected to outpace the rate of new mining projects coming into production, further upside is likely.
