Fanya indium auction fails, market under pressure

Chinese indium prices are expected to remain under pressure in the near term because of more uncertainty following a failed auction of stocks held by the bankrupt Fanya metal exchange.

The Kunming court held an auction of 3,609t of indium stocks from Fanya on 29-30 December, with a starting price of 790 yuan/kg ($113/kg). The auction, which ended at 10:00 Beijing time (02:00 GMT) today, failed to attract any buyers.

Chinese firm Kunming Rongke New Materials previously purchased Fanya's bismuth, gallium, germanium and selenium stocks, but did not participate in today's indium auction.

The higher starting price is likely the reason for the auction's failure, according to market participants. The government will reduce its starting price in the next auction, which may in turn weigh on the spot market.

Prices for 99.99pc grade metal were last assessed at Yn870-900/kg on 24 December following a fall of Yn20/kg on 19 December — the lowest level since at least November 2016 — from Yn1,050-1,100/kg at the start of November.

The Kunming court held two auctions of Fanya's stocks earlier this year. It failed to attract any bidders when it held a first auction for 37.41t of metal on 28 January, although China's national corporation for overseas economic co-operation CCOEC bought the stocks in the second auction for 34.64t of indium on 24 April at Yn37.411mn, equivalent to Yn1,080/kg without a 13pc value-added tax.

Fanya held 3,635t of indium stocks before it collapsed, equivalent to five to six years of production in China at 2018 production capacity utilisation rates. The brands of indium listed at the exchange include Yunhao, Zhongdu, Yumihe, Honghu, Debang and Yinggeer.