spent catalyst report

5/24/2018 Spent Catalyst Report

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RECOVERY OF METALS FROM SPENT CATALYST

Introduction

Catalysts are indispensable in the petroleum refining and petrochemical industry for

routine production of gasoline, diesel fuels, jet fuels, heavy oil hydrocarbons,

petrochemicals and plastics. Hydrocarbons (HT and HDS) and residue

hydrodesulfurization (RDS) are the major processes for converting crude oil into these

petroleum products. During processing, catalysts will become contaminated with

impurities in the crude oil feed and become deactivated. When that happens, they are

usually sent for regeneration where contaminates are removed. Ultimately, they will be

contaminated with coke, sulfur, vanadium and nickel in a manner and at a level thatmakes regeneration impractical. At this stage, catalysts are considered spent and they

may pose significant environmental problems, as landfill disposal is no longer accepted

as best practice. Hydro-desulfurization (HDS/RDS) of heavy oil produces spent

catalysts that contain molybdenum (Mo), vanadium (V), nickel (Ni) or cobalt (Co) at

concentration levels that has been found to be economical for recovery. Due to its

complex nature, metal recovery from HDS/RDS spent catalysts involves a combination

of pyro- and hydrometallurgical processes. At present, only a handful of companies

are capable to do so on a commercial scale and in an environmentally acceptable

manner. The energy savings and environment benefits associated with these recycling

activities are also quite significant. It has been estimated that recycling of various metal

scraps consumes approximately 33% less energy and generates 60% less pollutants

than the production of virgin material from ore. However with increasing demand of ever

more complex metallic composite and alloy materials in modern manufacturing

processes, it becomes imperative to develop appropriate methods for the recovery of

these valuable metals.

Catalyst demand worldwide

The oil refining industry operation is analyzed in order to estimate the future catalyst

market trends. According to the catalyst Group Research Co, the global refining catalyst

market has grown from $2.32 billion in 2001 to about $2.65 billion in 2005 (3.6% annual


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growth). Hydrotreating, fluid catalytic cracking, hydrocracking and isomerization

represent about 74% of the total catalyst market and will grow by about $34, $32, $11

and $2.5 million per year, respectively. Higher catalyst spending growth is expected for

the North America region ($27.5 million per year) Worldwide refiners need to produce

cleaner fuels and operate to meet environmental regulations. Therefore, refineries

should convert more heavy feedstock's to satisfy regional fuel market needs, and

minimize their profit margins which guides the developments in the refining catalyst

market. Refiners require more processing capacity and higher efficiency to satisfy

regional fuel market needs, therefore, more catalyst consumption is needed and in the

same be more resistant to deactivate under sever operating conditions. The refining

catalyst market is the most competitive segment of the global catalyst. This market was

increased at about 1.9% / year during 2001-2007. The data indicate that the current

catalytic processes, hydrotreating, FCC, naphtha reforming, hydrocracking and

isomerization, represent about 77% of the total refining catalyst market. The future

catalyst market increased through 2007- 2008 to about $ 2.58 billion (2.8%/ year). Most

growth occurred in North America, Asia Pacific, and the Middle East.

Refining Processes

Fluid catalytic cracking (FCC) and hydrotreating are the major processes for convertingcrude oil into petroleum products. FCC catalysts are ultimately contaminated with coke,

vanadium and nickel in a manner and at a level that makes regeneration impossible.

Hydrotreating heavy oil also produces spent catalysts containing coke, nickel, and

vanadium. In this instance, regeneration may be possible by selective removal of nickel,

vanadium and iron, but irreversible deactivation ultimately occurs. Catalytic cracking

breaks complex hydrocarbons into simpler molecules in order to increase the quality

and quantity of lighter, more desirable products and decrease the amount of residuals.

Catalytic cracking is similar to thermal cracking except that catalysts facilitate the

conversion of the heavier molecules into lighter products. Use of a catalyst in the

cracking reaction increases the yield of improved-quality products under much less

severe operating conditions than in thermal cracking. Typical temperatures are from

850-950 degrees F at much lower pressures of 10-20 psi. The catalysts used in refinery


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cracking units are typically solid materials (zeolite, aluminum hydrosilicate, treated

bentonite clay, fuller's earth, bauxite, and silica-alumina) that come in the form of

powders, beads, pellets or shaped materials called extrudites.

Fluid Catalytic CrackingThe most common process is FCC, in which the oil is cracked in the presence of a finely

divided catalyst which is maintained in an aerated or fluidized state by the oil vapors.

The fluid cracker consists of a catalyst section and a fractionating section that operate

together as an integrated processing unit. The catalyst section contains the reactor and

regenerator, which with the standpipe and riser forms the catalyst circulation unit. The

fluid catalyst is continuously circulated between the reactor and the regenerator using

air, oil vapors, and steam as the conveying media. A typical FCC process involvesmixing a preheated hydrocarbon charge with hot, regenerated catalyst as it enters the

riser leading to the reactor. The charge is combined with a recycle stream within the

riser, vaporized, and raised to reactor temperature (900-1,000 degrees F) by the hot

catalyst. As the mixture travels up the riser, the charge is cracked at 10-30 psi. Spent

catalyst is regenerated to get rid of coke that collects on the catalyst during the process.

Spent catalyst flows through the catalyst stripper to the regenerator, where most of the

coke deposits burn off at the bottom where preheated air and spent catalyst are mixed.

Fresh catalyst is added and worn-out catalyst removed to optimize the cracking

process.

Catalytic HydrotreatingCatalytic hydrotreating is a hydrogenation process used to remove about 90% of

contaminants such as nitrogen, sulfur, oxygen, and metals from liquid petroleum

fractions. These contaminants, if not removed from the petroleum fractions as they

travel through the refinery processing units, can have detrimental effects on the

equipment, the catalysts, and the quality of the finished product. Typically, hydrotreating

is done prior to processes such as catalytic reforming so that the catalyst is not

contaminated by untreated feedstock. Hydrotreating is also used prior to catalytic

cracking to reduce sulfur and improve product yields, and to upgrade middle-distillate


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petroleum fractions into finished kerosene, diesel fuel, and heating fuel oils. In addition,

hydrotreating converts olefins and aromatics to saturated compounds.

Catalytic Hydrodesulfurization Process

Hydrotreating for sulfur removal is called hydrodesulfurization. In a typical catalytichydro-desulfurization unit, the feedstock is deaerated and mixed with hydrogen,

preheated in a fired heater (600-800 degrees F) and then charged under pressure (up

to 1,000 psi) through a fixed-bed catalytic reactor. In the reactor, the sulfur and nitrogen

compounds in the feedstock are converted into H2S and NH3. The reaction products

leave the reactor and after cooling to a low temperature enter a liquid/gas separator.

The hydrogen-rich gas from the high-pressure separation is recycled to combine with

the feedstock, and the low pressure gas stream rich in H2S is sent to a gas treating unit

where H2S is removed. The clean gas is then suitable as fuel for the refinery furnaces.

The liquid stream is the product from hydrotreating and is normally sent to a stripping

column for removal of H2S and other undesirable components. In cases where steam is

used for stripping, the product is sent to a vacuum drier for removal of water.

Hydrodesulfurized products are blended or used as catalytic reforming feedstock.

Other Hydrotreating ProcessesHydrotreating processes differ depending upon the feedstocks available and catalysts

used, it can be used to improve the burning characteristics of distillates such as

kerosene. Hydrotreatment of a kerosene fraction can convert aromatics into

naphthenes, which are cleaner-burning compounds. Hydrotreating also can be

employed to improve the quality of pyrolysis gasoline (pygas), a by-product from the

manufacture of ethylene. Traditionally, the outlet for pygas has been motor gasoline

blending, a suitable route in view of its high octane number. However, only small

portions can be blended untreated owing to the unacceptable odor, color, and gum-

forming tendencies of this material.

FCC CatalystsAccording to one estimate (Avidan 1992), that the capacity of the worldwide FCC

catalyst production in 1990 was about 1,100 ton/day or 400,00 ton/year. Assuming that

90% of the production capacity is needed to replace spent catalyst from the FCC units,


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the total amount of spent FCC generated in the world is then about 360,000 t/y. Rao

(1993) estimated that there were about 336 FCC units operating around the world, each

processing 3,300 t/d of feed and requiring 2-3/t/d of freshcatalyst make up.Management of spent catalysts

On-going environmental concerns have had major impacts on the refinery industry in

general. First there was the response to phase out the lead in gasoline by most

developed countries, following the discovery of health hazard it poses on urban, young

populations through lead accumulation in their blood. Then there was the discussion in

some countries of a possible ban of an additive called MTBE (methyl tertiary butyl ether)

which was found to contaminate groundwater through leaky underground storage tanks.

Current regulations on the emission of sulfur oxides (SOx) from vehicles have pushed

fuel sulfur contents to very low levels (~10 ppm in some jurisdictions). Refineries are

now facing the formidable challenge of lowering the sulfur content in their products at a

time when the good quality low-sulfur crude is becoming scarce. Technically, removing

sulfur from the products during the refining stage is possible; however, the economic

impact could be substantial in terms of major process modifications needed. Another

major impact on the refinery will be the expected increase in the need for catalyst

replacement and disposal of the spent catalysts. This is because proportionally, moresulfur will report to the catalysts that will hasten their service life through sulfur

deposition. Safe disposal of these spent catalysts is a significant environmental problem

as landfill disposal is no longer generally accepted as the best practice. In many cases,

the spent catalysts have been classified as hazardous waste material and are subject to

stringent disposal guidelines. Most major refinery companies have set up special

disposal practices and only allow authorized waste collectors and processors to dispose

the catalyst waste. Metals including nickel, iron, and vanadium are often found in crude

oils in small quantities and are removed during the refining process. Trace amounts of

arsenic, vanadium, and nickel can accumulate in the pore structure of catalysts and

poison these processing catalysts.

Large quantities of catalysts are used in the refining industry for operation and

upgrading of various petroleum streams and residues. The catalysts deactivate with


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time and the spent catalysts are usually discarded as solid wastes. The quantity of

spent catalysts discharged from different processing units depends largely on the

amount of fresh catalysts used, their life and the deposits formed on them during use in

the reactors. In most refineries, a major portion of the spent catalyst wastes come from

the hydroprocessing units. This is because the catalysts used in these processes

deactivate rapidly by coke and metal (V and Ni) deposits, and have a short life due to

fouling of the active catalytic centers by these deposits. Furthermore, technology for

regeneration and reactivation of the catalysts deactivated by metal fouling is not

available to the refiners. The volume of spent hydroprocessing catalysts discarded as

solid wastes has increased significantly in recent years due to the following reasons:

- rapid growth in the distillates hydro processing capacity to meet the increasing

demand for ultra low-sulfur transportation fuels

- a steady increase in the processing of heavier feed stocks containing higher sulfur,

nitrogen and metal (V&Ni) contents, and

- rapid deactivation and unavailability of a reactivation process for reside

hydroprocessing catalysts.

Recovery of metals

In recent years, increasing emphasis has been placed on the development of processesfor recycling and recovering of the waste catalyst metals, as much as possible. In

literature there are many applied researches for spent metals recovery, particularly for

catalyst that contain high concentrations of valuable metals (Mo, Ni, V and Al2O3)

However, fluctuations in the market prices of the recovered metals and their purity,

together with the high costs of shipping significantly influence the economics of the

metal reclamation process making it less attractive for spent catalysts that contain low

metals concentrations. As the environmental pressure increases, and as the cost of

catalyst storage and disposal continues to rise, the utilization of spent refinery catalysts

for metal recovery is becoming a viable pollution. Therefore, the refiners are ready to

supply spent hydroprocessing catalysts free of charge in order to reduce their costs for

storage and disposal. If the market value of the recovered materials is high enough,

then it will offset, the processing cost yielding, a net profit to the reclaimer companies.


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Since January 2009, the Polish market, as well as other European Union countries,

force the EU regulation, which allows to sell of fuel with a sulfur content not exceeding

10 ppm (10 mg per kg). This regulation reduces permitted sulfur content of fuels five

times. Such tightened requirements allow to produce only low sulfur fuel, however it

requires complex technological operations, because the major oil contamination are the

organic compounds of sulfur. Their content varies depending on the origin of the

material. Growing demand for high purity, free of sulfur and aromatic hydrocarbons

motor gasoline, was the reason why a lot of technological operations restricting the

content of these compounds had to be applied. Two basic operations in today's

refineries supplying gasoline components to compose gasoline, are catalytic cracking

and reforming. The main objective of the catalytic cracking is to split hydrocarbons of

high molecular weight into fragments of a suitable volatility, enabling their use as fuels.

Products obtained from this process does not hav sufficiently high octane number,

required high compression for engines and it is necessary to subject them to catalytic

reforming, high-temperature heating of light petroleum fractions or cracking under

pressure. However, such systems, used for crude oil, are a constant source of spent

catalysts, which are formed by aging and deposition of inorganic contaminants,

petroleum coke and carbon-containing compounds and sulfur on the catalyst surface.

Spent catalysts in the refinery processes are classified as hazardous waste: they areflammable, explosive, toxic, corrosive, they also emit toxic gases in contact with the

environment.

Reforming and hydrogenation catalysts can be processed by dissolving a ceramic base

in sodium hydroxide or sulfuric acid. Before leaching, excess amount of coal and

hydrocarbons is burned. Recovery of platinum from this type of catalysts is complicated

and there may be a need to repeat the particular stages of the process to achieve the

required purity. Their number and sequence also depend on the type of discharged

pollutants. Many methods of metal recovery require the application of cyanide, chlorine,

hydrochloric acid and nitric acid. These reagents are used again in these processes, but

ultimately they require oxidation or neutralization with caustic soda and lime. Sludge

from wastewater treatment is analyzed for the content of recycled metals. Disposal of

spent catalysts is a challenge because of their form (fine-granulation and high porosity),


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complex chemical composition and content of hazardous substances: compounds of

transition metals, hydrocarbons and sulfur phase. Technologies of roasting processes,

hydrometallurgical and pyrometallurgical processes to separate the various metals are

mainly used for this purpose. The recovery of metals such as Mo, Ni, Co, V from spent

catalysts of petroleum is possible, however, for economics of this process influences of

prices metals, the content of this metal, transport costs and the purity of the recovered

metal. The demand for petrochemical catalysts, FCC and RFCC on the basis of Ni and

V is increasing and is projected to increase in global demand for them is estimated for

6.3% per year.

World demand for rare earth elements was estimated at 136,000 tons per year, with

global production around 133,600 tons in 2010. The difference was covered bypreviously mined above ground stocks. World demand is projected to rise to at least

160,000 tons annually by 2016 according to the Industrial Minerals Company of

Australia. Some mine capacity at Mt. Weld Australia has come on-stream in 2012, but

far below the projected 11,000 metric tons of capacity. Other new mining projects could

easily take as long as 5-10 years to reach production. In the long run, however, the U.S.

Geological Survey expects that global reserves and undiscovered resources are large

enough to meet demand. Many types of catalysts contain valuable platinum group

metals (PGM), rare earth elements (REE) that can be lost if treated pyrometallurgically,

base- and other metals (e. g. Ni, Co, Mo, Al, V, etc.). These can be technologically

treated and catalyst-recycling installations already exist due to the high economic value

of these metals and other elements in the catalysts. However, recycling rates can be

relatively low in countries with an inadequate collection infrastructure, or due to

economic reasons for viably running a catalyst recycling plant.

Platinum and Palladium Platinum and palladium have long been used as the reforming and hydrogenation

catalysts in petroleum industries, respectively. The demand of the petroleum catalysts is

expected to remain strong as many refineries and petrochemicals plants are under

construction and more to be constructed in the near future. The petroleum catalysts

containing platinum or palladium are discarded when its catalytic function deteriorates.


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In the catalysts, small amounts of platinum or palladium are contained in large volume

of support materials, typically alumina. Platinum and palladium in spent petroleum

catalysts can be recovered through various hydrometallurgial or pyrometallurgical

routes. The hydrometallurgical treatment is believed to be pertinent to smaller scale

plants while the pyrometallurgical treatment is more suitable for larger plants. Basically

two process options are mostly available for the recovery of platinum and palladium

using the hydrometallurgical methods. In the first method, platinum or palladium is

extracted directly from catalyst substrate using leachants. In this method, the catalyst is

leached in aqua regia or in hydrochloric acid with oxidants such as nitric acid, sodium

chlorate, sodium hypochlorite and chlorine gas.

Meng and Han modified the conventional leaching method using halogen salts as an

oxidant in autoclave. Nevertheless, in this method also the problem such as the loss of

platinum and palladium due to the leachate entrapped in the micropores of the catalyst

substrate could not be avoided. The second method is based on total dissolution of

alumina substrate thereby concentrating insoluble or sparingly soluble platinum and

palladium into the residue. This method has the advantages such as recovery of

aluminum sulfate as a byproduct and lesser consumption of the toxic leachant than in

the first method.

MolybdenumMolybdenum is the most important metal in human life. In recent years, the world

molybdenum demand has been increasing. The world's largest producers of

molybdenum materials are the United States, Canada, Chile, Russia, and China.

Though molybdenum is found in minerals like wulfenite (PbMoO4) and powellite

(CaMoO4), the main commercial source of molybdenum is molybdenite (MoS2).

Molybdenum is mined as a principal ore and is also recovered as a byproduct of copper

and tungsten mining. Processing of molybdenum from natural resources yields

molybdenite concentrate, which is the first commercial product. To generate MoS2 from

the ore, physical treatments like crushing, pulping, grinding and flotation are the

essential steps. The primary molybdnum ores will give as final product 90-95% MoS2,

whereas the complex ores of copper molybdenum will give 90% MoS2 as final product.


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VanadiumVanadium is an important by-product used, almost exclusively, in ferrous and non-

ferrous alloys due to its physical properties such as high tensile strength, hardness, and

fatigue resistance. The global supply of vanadium originates from primary sources such

as ore feedstock, concentrates, metallurgical slags, and petroleum residues. Other

vanadium reserves include potential recovery from oil-bearing sands, shale gas,

phosphate rocks, and crude oils.

Technologies for recovery of metals

Recycling also plays an important role in the production of molybdenum and vanadium

as individual metals or as the corresponding ferroalloys. A possible feedstock for this

purpose are catalysts from the petroleum industry for hydro-treatment (HDT), which

among others eliminate N, S and O and even metals (Ni, V, etc.) from the treated

hydrocarbons. The spent catalysts contain in general about 210 % molybdenum, 012

% vanadium, 0.5 4 % cobalt, 0.510 % nickel, up to 10 % sulphur and 10 % carbon,

and are therefore an interesting recycling resource for molybdenum and other metals.

An alternative for the recycling of these catalysts is pyrometallurgical treatment for the

recovery of ferroalloys. Otherwise, many hydrometallurgical processes are proposed for


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separating the individual value metals and extracting them in a pure state. All these

procedures follow the same concept. First, the spent catalysts are roasted to remove

carbon, sulphur and volatile species or are alternatively pre-processed with acetone.

The remaining material is then leached to dissolve the value metals. This uses different

solvents with pH-values ranging from acid to alkaline, depending on the roasting

conditions. For instance, roasting with soda converts molybdenum and vanadium into

water-soluble compounds. Finally, the metals are separated mostly by solvent

extraction, but selective precipitation and ion exchange can also be used as well as

absorption/desorption for purification of the solution. There is significant less activity for

the recycling of niobium and tantalum. Today, the recycling metallurgy of these metals,

their reclamation from tin slag and process residues is well-established.

The technologies used commercially for total or partial reclamation of components from

spent catalysts can be divided into two categories: hydrometallurgical and

pyrometallurgical. In some instances, a combination of the two technologies is also

used. The metals are reclaimed for sale or use, whereas the remaining metals are sold,

reused, or disposed of as nonhazardous waste.

Hydrometallurgical ProcessesThis process mainly involves leaching, washing and drying processes. Organic agents

(e.g., oxalic acid, citric acid, lactic acid, salicylaldehyde, aminophenol) and inorganic

agents (e.g., sulphuric acid, sodium hydroxide) or a combination of both can be used as

leaching agents (Furimsky, 1996). In some processes, the spent catalyst is roasted prior

to leaching in order to remove carbon and sulphur. The CRI-MET process is a

hydrometallurgical reclamation process used for the spent hydrotreating catalyst. When

processing Ni-Mo or Co-Mo spent catalysts by this method, the solution obtained from

the first leaching with weak caustic contains molybdenum, vanadium, and some

impurities. The extract is submitted to purification and separation, resulting in

concentrates of the corresponding metals. Molybdenum and vanadium can be

separated by precipitation or over an ion exchange resin.


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Pyrometallurgical Processes

This approach mainly involves calcining, sulfiding, nitrogen stripping, and chlorinating

processes. The pyrometallurgical process typically consists of the following steps:

1. Feed preparation, blending, agglomeration and palletizing;

2. Roasting for carbon and sulphur elimination;

3. Smelting in an electric furnace, resulting in a metal concentrate (i.e., matte) and slag;

4. Metal extraction and casting, or further metal refining.

The final products from such a process are typically stainless steel alloys, purified metal

concentrates, electrolytic nickel and cobalt, MoO3, V2O5, alumina slag, and/or some

precious metals.

Hydro/Pyrometallurgical Processes

Some processes combine the hydrometallurgical method with a pyrometallurgical

method. For example, in the Eurecat process, the solid obtained after the first leaching

step is submitted to a pyrometallurgical treatment, in which the solid is fused in an arc

furnace at over 1500 C.

Business Opportunity for EIL

Construction continues mainly on new HDT units of heavy feedstock and distillation

cuts to meet product quality adapted to future environmental regulations.

FCC and Hydrocracking capacity will increase significantly to satisfy fuel market

needs.

Refineries will continue to consolidate operations, rationalize capacity and increase

performance of existing facilities.

Global refining catalyst market will rise to $2.65 billion (3.9% per year) by 2005.

Spending on HDT, FCC, HCK, ISOM and other catalyst market will grow by about $34,

$32, $11, $2.5 and $2 million per year, respectively.

Higher catalyst spending growth is expected for North America region ($27.5 million

per year).


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The composition detail of spent catalysts from different sources is given below:

Catalyst Chemical Composition by wt Recovery as per

literature

Methanation Catalyst NiO 18-20; Al2O3 - Rest 57 - 96% Ni; 10% Al

based on process used

Reforming Catalyst NiO 30-32; Al2O3 Rest

(promoted with TiO2, Fe2O3etc)

57 - 96% Ni; 10% Al

based on process used

HDS Catalyst CoO 1-2; MoO 7-13; Rest

Alumina

80 - 90% Co; 90 - 95%

Mo

The global market for refining catalysts was $3.1 billion in 2011roughly a quarter of

the $12.5-billion process catalyst industry, according to IHS Chemical. The largestsegment in terms of value is Hydro-processing catalyst (HPC), while the largest-volume

products are the zeolite-based FCC catalysts that convert heavy petroleum fractions

into lighter, more-valuable components. Other major refinery catalyst market sectors

include hydrocracking and reforming catalysts, IHS says. Looking ahead, changes in

crude oil composition, desired product slates, and stricter emissions limitsparticularly

in high-growth emerging marketsfavor increased catalyst use globally, producers say.

Refiners are using more FCC resid catalysts to upgrade the bottom of the barrel and

increase olefins output, says The Catalyst Group (Spring House, PA). Demand for HPC

catalysts is also growing as refiners increase hydrotreating capacity to manage the

increasing sulfur content of crude and meet tighter sulfur regulations worldwide. The

Catalyst Group expects refinery catalyst demand to grow 3.7%/year through 2015.

Motto says refineries in Asia, India, and certain parts of the Mideast are looking for FCC

catalysts that help maximize propylene yields, Motto says. Albemarles FCC volumes

were up 14% YOY in 2012. Company sales of refinery catalysts in emerging regions

increased 29% in 2012. Also, emerging-region growth was cited as the largest

contributor to a 12% increase YOY in FCC sales volumes.

The price of the rare earth metals oscillated between $650/ounce and $750/ounce amid

a wider selloff of precious metals driven by concerns about the U.S. scaling back

stimulus and a struggling global economy. Palladium has already outperformed other


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precious metals so far this year with gold down 20%, silver down 28% and platinum

down 8%, palladium is the only bright spot appreciating by 3% on a year-to-date basis.

Palladium has successfully detached itself from the other precious metals and given

recent events we think this divergence will continue. Norilsk, the single largest producer

of palladium, reiterated their bullish view of the PGM market. We see a palladium

deficit of 1 million ounces for 2013 and a platinum deficit of 500,000 ounces. They

further suggested that palladium stockpiles at Russian state repository Gokhran are

probably exhausted, and not affecting the market anymore. Students of the market will

know that the Russians had a large store of palladium that they were selling on to the

market. The limited imports/exports of palladium through Switzerland in August seem to

confirm Norilsks statements. For perspective a 1,00,000 ounces deficit in the market

represents 15% of annual mine supply of the metal. A platinum ETF launched earlier in

the year has set investor demand on fire in South Africa, and hopes are high that a

palladium version would achieve the same result. The South African platinum ETF has

seen strong and steady inflows since inception with holdings now around 658k ounces.

This accounts for about 30% of global platinum ETF holdings after only four and a half

months of being active. Given investor interest in palladium this year, it seems

reasonable to expect that a similar structure for palladium will also be well-received.

Expectations are that this ETF will come to market by the end of 2013. With thepalladium holdings of all ETFs totaling 2.2 million ounces if this fund were to

accumulate palladium at the same rate as the platinum ETF, we would see the

palladium market move further into deficit. Further bullish positioning can be seen in the

futures market, but not where you would expect. Palladium has now overtaken silver in

the #1 position for the first time as the largest short position relative to world production.

spent catalyst report

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