Niobium market sees increased consumption
----Interview with Haicheng Cai
General Manager
Yanling Jincheng Tantalum & Niobium Co., Ltd
- Jincheng Tantalum & Niobium Co., Ltd was established in 2001. The company acts as a major tantalum and niobium metal producer in China. The registered capital of the company was 10 million yuan and the total investment of tantalum-niobium project reached 180 million yuan with three tantalum-niobium production lines and waste tantalum –niobium treatment center. They have two factories with an area of 12,000 square meters.
- Asian Metal: Hello, Mr. Cai. Welcome to the interview. Please briefly tell us about your company.
- Mr. Cai: Our company's main products include niobium bars (ingots), tantalum bars (ingots), tantalum-tungsten alloys (Ta2.5W, Ta10W), etc. We have applied for and gained a number of patents for our tantalum-tungsten alloy products. The company still puts product quality in the first place and we pay attention to technological innovation. In order to maintain technology leadership, we continuously increase research and development efforts, and the output and capacity are still expanding. This year, the annual production volume of tantalum metal expects to reach about 200 tons, and the annual production volume of niobium metal expects to reach around 400 tons.
- Asian Metal: What do you think are the main reasons for the strong demand in the Chinese superalloy market this year? What is the total consumption volume of niobium metal from the superalloy industry in 2022? How about this year?
- Mr. Cai: Since the beginning of this year, China has completely lifted the epidemic control measures and many infrastructure projects resumed normal operation. Considering the rapid development of China's aerospace industry, the demand for superalloy increased sharply, in 2022, China's total consumption volume of niobium metal reached about 1,000 tons, and it is expected that the total consumption volume will reach 1,300 tons in 2023, with an increase of about 30% YoY. Therefore, we remain optimistic about the niobium metal market this year.
- Asian Metal: Is there a substitution relationship between niobium-nickel alloy and niobium metal in the application field of superalloy, and if the cost of niobium metal remains high, will niobium-nickel alloy completely replace niobium metal? What is the price relationship between the two materials?
- Mr. Cai: Middle and low-end products can be partially replaced, but high-end products cannot be completely replaced. Niobium-nickel alloys can replace most of the niobium metal, but there are still small parts that cannot be replaced totally. Therefore, the prices of China's niobium metal market will be affected by the price of niobium-nickel alloy and other related products, even if the supply of raw materials continues to be tight and production costs continue to rise, the price of niobium metal still does not have unlimited rising conditions. The mainstream prices will fall to a reasonable range after reaching a certain peak.
- Asian Metal: Since the first quarter of 2023, the prices of tantalum and niobium concentrate increased, does the price of tantalum and niobium metal increased accordingly?
- Mr. Cai: Yes, as tantalum and niobium concentrate acts as the main raw material, it is decisive for the prices of tantalum and niobium metal. The mainstream prices for tantalite 30%min increased from USD85/lb Ta2O5 CIF China early this year to the peak of around USD108/lb Ta2O5 CIF China in mid-March, with an increase of around 27%. The mainstream prices for columbite 50%min increased from USD12.5/lb Oxides CIF China early this year to the peak of around USD17.0/lb Oxides CIF China in mid-March, with an increase of around 36%. As a result, our average sales prices for tantalum and niobium metals are currently about 30% higher than the price levels at the beginning of the year.
- Asian Metal: Why did the prices of niobium continue to rise in the second and third quarters of 2023?
- Mr. Cai: There are two main reasons for the rise in niobium metal prices in the second quarter and the third quarter this year. One is that the price of niobium concentrate continues to rise, and the second reason is that the downstream industry, especially the superalloy industry, has strong demand for smelting niobium, supporting the price rise.
- Asian Metal: At the beginning of the fourth quarter of 2023, raw material prices fall, will the price of niobium metal decline in the rest of the year?
- Mr. Cai: The market price of niobium oxide peaked at more than RMB350/kg (USD49.0/kg) in late Q3, at the same time, the price of niobium bars also experienced a peak of RMB620/kg (USD87/kg). In the fourth quarter, the price of niobium concentrate fell, resulting in the price of niobium oxide falling. We believe that this is a normal market volatility and niobium metal prices will also be adjusted with the price of raw materials. However, on the whole, downstream demand remains relatively stable, so prices will not decline significantly, mainly in a small consolidation.
- Asian Metal: What is your forecast for niobium and tantalum market?
- Mr. Cai: Although downstream demand increased to some extent, domestic factories have large production capacity. Since the end of the Chinese Spring Festival holiday, the main factories were under full production, resulting in an oversupply in niobium metal market. The current mainstream prices decreased to RMB590/kg (USD83/kg). It is expected that the consumption of tantalum metal this year remains nearly the same as last year with larger consumption in the military industry and the tantalum target industry. Discouraged by lower tantalite prices, the mainstream price of tantalum metal is expected to fluctuate at RMB2,200-2,400/kg (USD308-336/kg).
- Asian Metal: At present, the political and economic situation both at home and abroad remains complex and changeable, and it is more difficult to control raw material supply and procurement costs. What strategy does the company have to maintain production costs and ensure normal production operation?
- Mr. Cai: People say, "He who fails to plan, plans to fail". The company considers from a long-term perspective, makes procurement plans in advance to prepare sufficient raw materials. We would find a balance between inventory and output to maintain steady production.
- Asian Metal: What is the company's future plan?
- Mr. Cai: We plan to build the largest tantalum and niobium metal plant in China within 3 years, and become the world's largest tantalum-niobium metal producer within 5 years.
