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 2022. 

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 2017, 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 2017 and early 2018. 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 climbed to a five-year high in early 2018. 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. Fluorspar has been identified as a strategic raw material by the US Department of Interior, European Union and several other government bodies around the world.

China accounts for about 50% of world fluorspar production and sudden mine closures there since 2017, 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. 

Fluorspar prices outside China and those negotiated on long-term contracts, for example the South African FOB acidspar price ex-Durban, have recorded significant increases since supply disruptions in China hit international markets. 2019 fluorspar contract negotiations will begin in September-October 2018 and the agreed prices will be the benchmark for the industry. 

Reports of tough environmental inspections continue to be reported from China in 2018, and while the full extent to which fluorspar production has been affected is being debated, exports from China have continued to decline. Consumption is expected to continue to be driven by fluorspar’s use in chemicals, steel and aluminium.

New fluorspar production capacity in Canada came online in 2018 and new capacity in Africa is expected by 2019. Canadian Fluorspar is expected to increase production capacity to 200,000tpy acid-grade concentrate, while SepFluor in South Africa will produce 180,000tpy acidspar plus 30ktpy metspar.