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Emerging industry demand space opens, small metal prices will rise
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Emerging industry demand space opens, small metal prices will rise

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  • Time of issue:2017-09-21
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(Summary description)Since 2016, the price of base metals has experienced a round of dramatic increases. In contrast, the overall price of small metals is still dormant at a low level. "In fact, this year's small metal supply-side reforms have been very vigorous. As the downstream demand is gaining momentum, some varieties are worthy of attention next year.

Emerging industry demand space opens, small metal prices will rise

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Since 2016, the price of base metals has experienced a round of dramatic increases. In contrast, the overall price of small metals is still dormant at a low level. "In fact, this year's small metal supply-side reforms have been very vigorous. As the downstream demand is gaining momentum, some varieties are worthy of attention next year. "At the "2016 Global Small Metals Forum" held a few days ago, Feng Juncong, Secretary General of the Indium, Bismuth and Germanium Branch of the China Nonferrous Metals Industry Association, and the Secretary General of the Gallium, Selenide and Tellurium Branch said. Among them, the prices of indium, gallium, and tellurium, which have gradually improved in demand, have hopes of rebounding, and the prices of tungsten, molybdenum, and antimony, which are similar to large metals, have also been demanded for price increases. In addition, factors such as national purchasing and storage and destocking may also promote a wave of market conditions. Generally, metals such as tungsten, molybdenum, indium, germanium, bismuth, gallium, and tellurium with a small market are collectively referred to as “small metals”. "Because of the insufficient development investment in the high-end links of the industrial chain such as key technologies, key materials, and key components in the past, there is not much demand for downstream applications, resulting in a large number of domestic small metal products exported in the form of raw materials. "Wang Qinhua, vice chairman of the China Nonferrous Metals Industry Association, pointed out the crux of the low price of small metals. However, “With the optimization and upgrading of China's economic structure, the high-tech industry has developed rapidly, and the demand for small metals has also increased significantly. "She added.

Specifically, the liquid crystal display, infrared technology, optical fiber and microwave communications in the emerging industries have all driven the rapid growth of the demand for related small metals. Among them, display targets accounted for 75% of the downstream consumption of indium. Wang Qinhua said that China's production scale in this field is currently expanding, and large-size indium targets have been put into trial production, driving an average annual growth rate of indium consumption of about 7%. It is expected that demand growth will continue to accelerate next year.

In the next two to three years, the domestic LCD panel market is expected to grow substantially. Huang Shicheng, executive deputy general manager of Guangxi Jinglian Optoelectronic Materials Co., Ltd., said that in the future, the number of domestic panel production lines will increase from 25 to 40, which will drive the demand for indium for ITO targets. It is predicted that by 2018, China will become the largest panel supplier and ITO target demander.

In addition, the current localization of germanium tetrachloride for optical fiber is accelerating, and the trend of replacing imports is obvious, which has stimulated the continuous growth of domestic germanium demand. It is reported that 90% of the downstream of germanium is used in optical fiber and infrared fields. In the future, the construction of optical fiber and other infrastructure will accelerate, and there is still a large room for growth in the demand for germanium.

In terms of gallium applications, with the rapid expansion of the smartphone market, gallium arsenide and LED markets still dominate the domestic gallium consumption, with an average annual growth rate between 15% and 30%.

Molybdenum is one of the first small metals to rise this year. Baichuan Information's quotation shows that the price of 45% molybdenum concentrate has risen from 735 yuan/ton kWh at the beginning of the year to 1055 yuan/ton kWh recently, an increase of 43.5%. The price of ferromolybdenum has also risen and it has risen to 77,500 yuan/ton in the same proportion during the year.

“As the price of molybdenum fluctuates below the cost line for a long time, molybdenum companies have stopped production and reduced production more, and the supply has decreased to a certain extent. The downstream steel industry is driven by the economic recovery, the increase of automobile steel, and the rebound of oil prices. There has been a certain rebound, supporting the molybdenum market this year. "Duan Guomian, general manager of Luoyang Molybdenum Sales Company, told reporters that the company's sales have been very good this year, and the goods have been "basically sold out".

 The improvement in both supply and demand drove the recovery of molybdenum prices. According to Antaike data, the national molybdenum concentrate production decreased by 7.14% in 2016. On the demand side, the export volume of molybdenum products increased by 54% year-on-year due to higher international molybdenum prices and exchange rate fluctuations; domestic molybdenum consumption also rebounded by 18.3% year-on-year. Affected by this, the domestic excess supply of molybdenum has shrunk from 21,500 tons in 2015 to more than 1,400 tons this year.

“Without a significant increase in molybdenum supply, domestic molybdenum prices are expected to continue to rise moderately in 2017. "Antaike's senior molybdenum analyst Gao Hailiang predicts that next year, stainless steel production, which accounts for 40% of downstream molybdenum consumption, will still grow by 6% to 8%.

For the future, Feng Juncong said that vigorously developing the application market is still the main task of the small metal industry. Under the background that the downward pressure on the overall economic growth still exists, the current price improvement is not a trend increase, but a phased rebound.

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