Indium: Prices remain depressed by scale of Fanya stockpiles

Indium prices are at their lowest level for a decade as stockpiles from the failed Fanya Metal Exchange, which operated from 2011–2015 in Kunming, China, continue to suppress a recovery.

Mandy Yin, product manager at Zhuzhou Keneng New Material, told delegates at the MMTA International Minor Metals Conference in Edinburgh that, while global indium consumption had increased by around a third in the last decade, Fanya had “stimulated” Chinese indium production in excess of market demand.

As a result, some 3.6kt of indium is reported to be held in physical Fanya stockpiles, representing more than four years’ global primary indium supply. Roskill estimates primary indium output to have been around 750-800t in 2018, with a similar volume coming from secondary sources.

In January 2019, the Kunming Intermediate People’s Court auctioned nearly 35t of indium stocks through the Alibaba e-commerce platform, but failed to attract any bids. A second 35t indium auction was announced on 17th April, scheduled to take place on Alibaba on 24th April, with a starting price 10% lower than the January auction. Material purity is reported to be 99.995%.

Roskill view:

The failure of the recent indium auction has further affected market sentiment, with participants unsure of how the stockpiles will be managed if the forthcoming auction fails again. Keneng’s Yin outlined five potential outcomes, including adding the stocks to a national reserve, the return of products to investors, and the purchase of stocks by state-owned enterprises.

With some of the inventory comprising material brands that Yin reported were “unfamiliar to the market”, potential buyers may prefer to purchase from their established contacts—particularly as prices remain suppressed—rather than bidding for material of unknown provenance.

Industry participants will likely be watching the indium situation closely for signs of how stockpiles of other metals traded on Fanya may be dealt with. Fanya’s tungsten stocks, for example, are equivalent to just over 30% of China’s production of ammonium paratungstate (APT) in 2018—a factor that has helped to keep prices in check, despite environmental reforms continuing to affect Chinese supply.

Roskill’s NEW Tungsten: Outlook to 2028 report was published in March 2019. Click here to download the brochure or sample pages or access further information. To discuss the indium and tungsten markets with Roskill, contact Jessica Roberts: