EDITOR: | June 26th, 2013 | 4 Comments

Potash shipments surge; Japan targets erbium use; China’s nuclear industry in breakthrough

| June 26, 2013 | 4 Comments
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Not-all-Potash-is-the-Same-Carnallite-vs-Sylvinite-300x206Potash shipments to Brazil and China surged in the first half of 2013, reports Scotiabank in its monthly commodities update. But prices still have to play catch-up.

Spot prices (free on board or FOB, Vancouver) rose slightly in May to $417.50/tonne, up from $405 in April. Canpotex concluded a sale in Asia, moving 15,000 tonnes at $470 (cost and freight, or delivered – but even compared with the FOB price, this would suggest that buoyancy is easing back into the market).

But Scotiabank says buyers in Asia and Brazil continue to resist higher prices, with China seeking a roll-over of its first half cfr contract at $400/tonne instead of the higher prices being asked by producers. Scotiabank says India’s present contract price is $427/tonne cfr.

So here’s the bottom line: prices may still be struggling, but there are again signs of life on that front; meanwhile, shipments have picked up markedly. The bank says China’s imports jumped by almost 19% between January and April – 2.67 million tonnes over that period, compared with 2.25 million in the first four months of 2012. Brazilian imports are doing better – up 53% year on year to 2.2 million tonnes so far this year.

Japan’s REE DiversificationRARE EARTHS: It seems the Japanese will leave no stone unturned in their quest to lessen their dependence on rare earths. The latest item involves the “reduce” part of their “recycle, reduce, replace” strategy.

The Nikkei news service reports that the University of Tokyo and Sumitomo Electric Industries are looking at ways to maintain amplification levels in optical fibres after reducing the amount of rare earths involved. The scientists have come with a new technology to make it possible to observe rare earth metals in optical fibres, which should make it possible for researchers to discover how they can get away with using lower quantities of these rare earths.

As the report explains, amplifiers have to be installed at about every 100km along an optical fibre, and they are doped with about 0.2% of rare earths, mostly erbium. The REE metals, when electrified, help amplify the signals. The research team has now been able to observe individual atoms of erbium with their new technology – making it possible to figure out how these are diffused.

URANIUM and NUCLEAR ENERGY: China has now achieved enrichment of uranium for the first time. As China Central Television reports, this is a vital step for the country’s nuclear power push as natural uranium contains only 0.7% of the key Uranium-235, most of it consisting of Uranium-238. The report said China’s nuclear power stations need uranium containing up to 5% of Uranium-235.

The China Daily newspaper reports that journalists at the weekend were allowed into the enrichment plant, located in Lanzhou, Gansu province. It added that all the equipment, including the centrifuges, was developed by the China National Nuclear Corporation, which announced the enrichment technology is now ready for industrialisation.

The enriched fuel will be transported to every nuclear power station in China.

And here’s a point made by analysts at Canaccord Genuity in Sydney: there are not many commodity sectors which have not been influenced by ‘hot’ money as speculators looked for quick returns. Indeed, spot uranium dropped slightly again this week, down 20c to $39.65/lb.

As the report states, “if anyone wants to bother with fundamentals they will be (aware) that the uranium market is marching towards a serious supply shortage, though there is nothing new in that equation.

“We know that the conversion of weapons-grade to power-station uranium is ending this year. We know that China is continuing with its aggressive increase in nuclear power activity, and Japan is moving to bring reactors back on stream.

“The only thing lacking is the reaction of investors – they have not yet embraced the thematic.”


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Comments

  • Canon Bryan

    Small point. This is not China’s first achievement of uranium enrichment. China already had three small plants with capacity of 1.5 million SWU/year. Please see this excerpt from the World Nuclear Association’s briefing on China Nuclear Fuel:

    “A Russian centrifuge enrichment plant at Hanzhun, SE Shaanxi province, was set up under 1992, 1993 and 1996 agreements between Minatom/Tenex and CNEIC covering a total 1.5 million SWU/yr capacity in hina at two sites. The first two modules at Hanzhun came into operation in 1997-2000, giving 0.5 million SWU/yr as phases 1 & 2 of the agreements. In November 2007, Tenex undertook to build a further 0.5 million SWU/yr of capacity at Hanzhun, completing the 1990s agreements in relation to the Hanzhun plant. This was commissioned ahead of schedule in mid 2011.”

    However, this new plant does represent China’s first proprietarily developed enrichment plant, and that is certainly not insignificant.

    June 26, 2013 - 1:08 PM

  • Joeri Van hee

    I was happily surprised by Obama’s plan to fight climate change, three times hoeray for the rare earth sector, which should benefit from Obama’s Change! I might yet still start to like this president!!!

    June 26, 2013 - 2:54 PM

  • Allan Branch

    In regard to the rare earths part of this story, it is interesting to see the reference to Japan’s “recycle, reduce, replace” strategy. I love alliteration, so this caught my eye. In my article “Rare Earths and Elastic Markets” I mentioned the efforts by manufacturers when faced with an expensive component are to eliminate or find a cheaper supplier. Reduction is part of the elimination mode and recycling is part of the alternative supplier mode, so this is consistent with the elasticity theory so far. Whew!

    Erbium is interesting. Its salts have an attractive light pink color in the visible spectrum, referred to as rose usually, and outside of the visible spectrum it has interesting infra red wavelengths. This is important because it means the element is a source of red and infrared photons when exited. Infra red is one of the wavelength bands used in fiber optics, so it is not surprising that one use of Erbium is as a doping substance in fiber optics, in both transmission but more importantly at the regular amplification stations that long fiber optic cables must utilize to compensate for losses. Technology in this area is quite mature so any new discovery is jumped on rapidly to get greater efficiency from the fibers. (Other recent research has been the development of stable optical vortices, which promises to increase bandwidth.) So erbium is in demand.

    Hope is that the heavies, and Erbium is a heavy at atomic number 68, will buck the trend and return to higher prices. So far the price of Erbium as its oxide is down about 36% for the last 12 months and 21% down when sold as metal, so unfortunately this one example is not showing signs different from the general trend. One reason might be that fiber optic cables are at least partly a commodity in the elastic sense of my article, which is why research to reduce the dependence on it in cables is active.

    June 28, 2013 - 9:50 PM

    • Allan Branch

      Actually I made a mistake with the metal prices of erbium which are down 21% for the week, but have held steady for the year, so at least when sold in the metallic form has held its price steady. That is exciting. As a metal is it used in hard alloys, in nuclear absorption rods and for high end lasers in medical applications. Some of these are not commodity markets.

      June 28, 2013 - 9:57 PM

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