Global Industry, Markets & Outlook

Fluorine is the most chemically reactive element and world fluorspar demand is dominated by the chemical industry. This dominance is expected to continue throughout the outlook period to 2021.

All fluorochemicals are derived initially from the manufacture of hydrofluoric acid (HF), itself produced from acid-grade fluorspar (acidspar). The largest chemical sector application for HF is in the production of fluorocarbons. Overall, production of fluorocarbons is estimated to have consumed approximately 1Mt of HF in 2016, requiring >2Mt of acidspar. This was split between non-feedstock fluorocarbons and feedstock fluorocarbons and other fluoro-organics. Consumption of acidspar, driven mainly by this sector, increased in 2016 and early 2017. In contrast, demand for metallurgical grade fluorspar, metspar, declined. Metspar now accounts for just 39% of total world demand for fluorspar.

Chinese fluorspar spot prices spiked to a four-year high in mid-2017. This was a dramatic turnaround; until February 2017, fluorspar prices had fluctuated around five-year lows as world supply outstripped demand. Even at their five-year low level, however, it is important to note that fluorspar prices were five times higher in US$/t than they were in 2000. The price of fluorspar generally is on a long-term upward trend. Fluorspar cannot be recycled, it must be mined. It is an essential raw material in many modern consumer products. As an example, an estimated half of all new medicines contain fluorspar derivatives.

China accounts for about 50% of world fluorspar production and the sudden mine closures, particularly in southeastern China, were prompted by environmental inspections and coincided with a time of lower seasonal production levels due to traditional winter production cuts. For decades, China has produced approximately half of world fluorspar production.

Fluorspar prices had remained stable outside China as most consumers are covered by long-term contracts amid steady demand. 2018 fluorspar contract negotiations will begin in September-October 2017 and the agreed prices will be the benchmark for the industry.

Producers outside China have received enquiries from consumers worldwide, including from China and Asia, indicating some supply pressure in Asia. Consumption is expected to continue to be driven by fluorspar’s use in chemicals, steel and aluminium.

New fluorspar production capacity is expected in Canada by the end of 2017 and by 2019 in Africa. Canadian Fluorspar will mine 200,000 tpy acid-grade concentrate, while SepFluor in South Africa will produce 180,000 tpy acidspar plus 30ktpy metspar.

Roskill experts will answer your questions…

  • Which applications for fluorspar are likely to drive future growth?
  • Will fluorspar use in the fluorocarbon market continue to be challenging as both the European Union and USA introduce more restrictions on the use of certain hydrofluorcarbons and hydrochlorofluorocarbons due to their GWP (Global Warming Potential)?
  • What is the outlook for crude steel production?
  • Will the use of fluorspar in primary aluminium production continue to grow? How will trends in unit consumption of fluorspar, quantity of AlF3 produced from by-product FSA and the level of primary aluminium output affect fluorspar demand?
  • Will rising prices support a recovery in production in Africa? To what extent might new projects outside China contribute to alleviating supply concerns?