international trade developments in the fluorspar market
TRANSCRIPT
International trade developments in the fluorspar market
16th October, 2018
Kerry Satterthwaite
[email protected] www.roskill.com
Disclaimer
The statements in this presentation represent the considered views of Roskill Information Services Ltd. It includes
certain statements that may be deemed "forward-looking statements“. All statements in this presentation, other
than statements of historical facts, that address future market developments, government actions and events, are
forward-looking statements. Although Roskill Information Services Ltd. believes the outcomes expressed in such
forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future
performance and actual results or developments may differ materially from those in forward-looking statements.
Factors that could cause actual results to differ materially from those in forward-looking statements include
changes in general economic, market or business conditions.
While Roskill Information Services Ltd. has made every reasonable effort to ensure the veracity of the information
presented it cannot expressly guarantee the accuracy and reliability of the estimates, forecasts and conclusions
contained herein. Accordingly, the statements in the presentation should be used for general guidance only.
• Fluorspar market in 2018
• Global trade picture
• China’s trade role in 2018
• Outlook for Chinese trade
• Some extra Roskill info on electric vehicle markets
Overview
Factors behind the high prices in 2018
• World fluorspar production down 10% y-on-y in 2017 to its lowest level in a decade
• World acidspar output down 8% y-on-y – to 3.7Mt
• World metspar production down 12% y-on-y to total 2.0Mt
• Chinese production down by 13% y-on-y. Both acidsparand metspar affected by production shutdowns
• Fluorspar named as strategic in 2017 by Chinese government (and by the European Union and US Dept of Interior)
Chinese supply disrupted 2017/2018
Acidspar
Trade values show significant acidspar price recovery
• Chinese supply disrupted
• President Xi Jinping (an ex-chemical engineer) is focused on pollution and a “Beautiful China” – not spectacular economic growth at any cost
• Acidspar prices are no longer less than production costs in US$/t for miners in some rest of world (ROW) locations
• Chinese acidspar exports peaked in 2011 – the current 5 year plan is focused on adding value within China
Source: GTT and Roskill
World: Acidspar export values by major exporting country, 2002 to 2018 (US$/t)
HF
Trade values show significant HF price recovery
• The acidspar supply disruption has had a clear impact on the HF supply chain in China
• There are no list prices for HF and no terminal market; most material is sold directly from producer to consumer on a contract basis, with smaller volumes sold on the spot market.
• Average HF export values tend to follow acidspar price trends
• China accounted for around half of the world’s HF exports in 2017 with an average value of US$1,546/t. Source: GTT and Roskill
World: HF export values by major exporting country, 2002 to 2018 (US$/t)
Metspar
How has metspar trade developed?
• Mexican exports have increased significantly in 2017 and 2018
• Our model suggests Mexican exports will reach 446kt by the end of 2018
• Mexico is by far the largest exporter of metspar
• Chinese metspar exports peaked in 2012 – the current 5 year plan is focused on adding value within China
Source: GTT and Roskill
World: Metspar exports by major exporting country, 2007 to 2018 (t)
Has China already become a net importer of metspar?
• Last year in Mexico, I mentioned that China is the world’s largest fluorspar consumer and output of value-added F products is growing
• Chinese fluorspar import volumes are becoming significant
• This year Roskill’s trade modelling software appears to indicate that Chinese metsparexports will total 204kt in 2018, while imports will total 233kt in 2018!
Source: GTT and Roskill
World: Metspar imports by major importing country, 2007 to 2018 (t)
Metspar trade flows:
• Mexico, China and Mongolia are by far the world’s largest producers and exporters of metspar (fluorspar that is <97% CaF2)
• Mexico is now the leading supplier of metspar to Europe, North and South America and Japan.
• China exports primarily to South Korea, Taiwan, India and Japan
• Mongolia mainly supplies Russia and China
Source: GTT and Roskill
Global crude steel production growth relatively flat
World: Crude steel production by region, 2008 to 2018 (Mt)
Source: Roskill
China: CAGR of crude steel production in five-year increments, 1990 to 2020 (%py)
Source: Roskill
• Chinese steel production growth relatively weak in this 5 year period but, by the start of 2018, had recovered by 6% since the first decline of 2015
What will the future bring for steel?
• Global crude steel production has fallen slightly this year but is expected to begin small-scale recovery from 2019
• China has reached peak steel, however, and growth rates will never return to the highs of the 2000s
• This will ultimately limit growth in metspar demand in this application
Source: Roskill
China: CAGR of crude steel production in five-year increments, 1990 to 2035 (%py)
Aluminium fluoride
AlF3 exports in 2018 show:
• China still the main AlF3 supplier to international market, exporting globally, but …
• Chinese exports fell significantly in 2017 and 2018
• EU and North American trade remains largely intra-regional
• AlF3 transport over long distances is no problem…
• Therefore regions, or countries, do not need to be self-sufficient
Source: GTA, Roskill
Source: GTT and Roskill
Chinese AlF3 prices soaringAlF3: Average export values by major exporters (US$/t FOB)
Source: GTT, Roskill
Chinese AlF3 exports plummetingAlF3: Chinese exports (t)
Source: GTT, Roskill
• Trade stats show domestic fluorspar self-sufficiencyis up
• >66% of world consumption was domestic in 2017
• Primarily due to evolution of China from fluorsparsupplier to producer of value-added F products
• Other countries have emerged to fill the gap left byChinese fluorspar exports
• Chinese government focused on conserving naturalresources – will this leave a greater gap for fluorsparsuppliers in ROW?
Trade conclusions
Some Roskill information on electric vehicle (EV) markets…
Why transport electrification is happening:
Source: Roskill
China
USA
EU 27
Japan
KoreaCalifornia
CanadaIndia
0
2
4
6
8
10
12
2007 2015 2017 2020 2025 2030 2040 2050
Fuel economy standards, 2007 - 2050 targets (L/100Km)
China
US
EU 27
Japan
Korea
California
Canada
India
0
50
100
150
200
250
2007 2015 2017 2020 2025 2030 2040 2050
CO2 emissions standards, 2007 - 2050 (g/Km)
Plug-in EV sales are only part of the picture
• Plug-in vehicles = 37% of passenger car sales
by 2027.
• But...77% of passenger cars sales will have an
advanced battery as part of the power train.
• 48V & LSEV may use lead-acid batteries.
• Demand (GWh) for automotive Li-ion
batteries will grow at CAGR 34%.
• China Li-ion battery overcapacity today.
• But it expects to become world’s battery
exporter (China 130GWh demand by 2020 vs.
320GWh world demand).
Source: Roskill
0%
10%
20%
30%
40%
50%
60%
70%
0
500
1,000
1,500
2,000
2,500
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Energy demand by Li-ion battery application (2018-2027, GWh)
Automotive
ESS
Power &
MotivePortable
Growth rate
(RHS)
0
10
20
30
40
50
60
70
80
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
EV sales, passenger & commercial units (2018–2027, M units)
LSEV
12V
FCEV
48V
EV performance
EV standard
PHEV
HEV
Trends in choice of cathode material not just driven by performance
• Much talk about rapid transition to higher-
nickel grades of NCM (or NCA)
• But other materials, including LMO and LFP
should not be discounted (commercial EVs)
• NCM 811 is not the be-all and end-all that it
has been made out to be (NCM622, 217...)
• Not every EV will be a Tesla: lower-
performance vehicles can get by with
alternative chemistries (LFP) = lower costs
• Ultimately, choice of material may be driven
by raw material availability, and cost/benefit
Source: Roskill
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2018201920202021202220232024202520262027
LIB Cathode material demand (2018-2017, Mt)
NCM-LMO (high Ni)
NCM-LMO (mid Ni)
NCM-LMO (low Ni)
NCM Other
NCM 811
NCM 622
NCM 523
NCM 111
LMO
LFP
NCA
HE LCO
LCO
HF used in purification of natural flake graphite for LiB anodes
Source: Roskill estimates
• Use of silicon and tin in anode materials have
received much on-and-off attention
• Silicon appears to be making come-back with
through use of nano-carbons and other tech
• Lithium-based anode materials have been hyped
by producers such as BASF, with the potential to
lift energy densities to 400Wh/kg
• LTO used in e-bus (Yutong, Proterra) – ultra-fast
charging capabilities (3-10x cycles than standard
Li-ion batteries) – similar spec density LFP
• Once again, raw material availability may play
some factor in driving choice of material
Spherical
graphite (from
natural flake)52%
Synthetic
graphite
34%
Other natural
graphite
7%
Other carbon
5%
Silicon, tin, etc.
2%
Active materials used in anode manufacture, 2017 (%
of volume)
EV challenges & solutions that will affect HF, lithium hexafluorophosphate (LiPF6) etc
Source: Roskill
• Charging infrastructure & availability of raw materials are clear bottlenecks beyond range
anxiety
• CATL CTO – “Only those players who got early in the battery game & got deals with miners
will be able to keep raw materials costs down“
• Deals Auto/battery OEMs – miners happening since 2010 (but only Asian OEMs involved)
• Battery recycling necessary to ease possible bottlenecks - already profitable – focus on
closing deals Auto OEM – recyclers (volume) – regional business.
• Chemistries – slower reductions in battery packs costs. NCM 811 feasible...but energy
density at all costs is wrong priority according to battery technology executives.
• Investors focus on feedstock but...what about processing capacity – spherical graphite,
cobalt oxide, nickel sulphate – Asian market concentration
• Daimler CEO expects battery cells to be a commodity - full reliance on Asia – risks.
Roskill fluorspar report, 2018
Thank you for listening!
For more information on
Roskill’s fluorspar research and
consulting work please contact:
Kerry Satterthwaite,
Division Manager –Carbon & Chemicals
+442084170087
@kerrysatt