Outlook to 2029, 14th Edition
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 2029.
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 2018, 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 2018 and early 2019. 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 for both metspar and acidspar have reached multi-year highs in 2018 and 2019, with lower-grade metspar sometimes bizarrely costing more than >97% purity acidspar. The turnaround in supply/demand was dramatic; 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 The 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. 2020 fluorspar contract negotiations will begin in September–October 2019 and the agreed prices will be the benchmark for the industry.
Tough environmental inspections are reported to be continuing in China, 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 South Africa started up on 1 August 2019. Canada 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, with plans to add value by also producing HF and aluminium fluoride.
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?
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