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Rising Prices For FinnAust? - (FAM)
18/11/2016 (119264)

Rising Prices For Finnaust?

This is a straight reproduction of a report which ought to be bullish for FinnAust Mining (FAM). The company is still putting the pieces in place for a large sampling exercise in 2017, hopefully then moving on to full scale production, lifting from the beach in Greenland the ilmenite which can easily be converted to titanium. Over the next couple of months we should hear more news of progress, including a resource estimate. The share price has been firming (8p to 8.25p now) in anticipation, and as a short seller appears to be being squeezed. It ought to be good. (I have a holding in FAM).
TZMI Market Update: September 2016
Without new mines the sulfate ilmenite market will be in shortage by 2018, according to the global independent expert TZ Minerals International (TZMI) in its recently released quarterly Market Update for the titanium and zircon value chains.
The looming shortage is already pushing prices up in 1H 2016, particularly in China for domestic ilmenite. China is expected to lead demand growth for sulfate ilmenite in the next few years for direct use in its sulfate process route dominated pigment sector and for smelting into slag for use in titanium metal production and its emerging chloride pigment sector.
With the market starting to emerge from a prolonged period of low prices, no significant new sulfate ilmenite mines are currently under construction or ready for final investment decision. With limited funding options for junior miners, it is unlikely they will be able to fill the gap given the long lead times to complete studies, secure funding and construct new supply.
The net result, according to TZMI’s analysis, is that after a number of years of supply surpluses, excess sulfate ilmenite inventory is now being worked off and the market is heading into a period of sustained shortages from as early as 2018 without supply from new mines.
TZMI Supply and demand forecast for sulfate ilmenite 2010-2020

Market sentiment has improved as demand for TiO2 pigment picked up during the traditional ‘coatings season’ in the Northern Hemisphere. The pigment industry experienced a robust 1H 2016 in regards to product sales, with year-on-year demand growth of 9% and 7% respectively during Q1 and Q2.
The next test will be how the pigment producers respond to the seasonal downturn in demand in Q4 and Q1: keep production high and build inventory in anticipation of strong demand next paint season or match production to seasonal demand and maintain normal inventory levels?
TZMI forecasts global demand for chloride titanium feedstocks to increase by 4.3% pa from 2015 to 2020 and chloride ilmenite supply to fall by 20% year-on-year in 2016. Another positive factor for chloride stock is the ongoing depletion of mineral sands resources, particularly at some of the larger operations. Rio Tinto’s Richards Bay Minerals, Iluka’s SR2 kiln and Tronox Australia will require new ilmenite mines to supplement their declining captive ilmenite feeds.
While these developments are expected to be positive for chloride feedstock market dynamics other factors could impede this translating into higher prices for chloride feedstocks. On the supply side, a number of chloride slag producers have curtailed production in the past few years in response to weak market demand. As a result installed capacity significantly exceeds forecast demand and discipline supply will be important to ensure supply does not exceed demand.
While pigment producers have been successful in raising prices in 2016, feedstock price increases have yet to see much movement (except Chinese domestic ilmenite), although recent trade data has seen the first evidence of other prices firming. Mineral sands producers have also reported increases in volumes and in offtake, with some reporting all products fully sold for 2016.
TZMI anticipates global sulfate ilmenite price increases gaining momentum in 2H 2016 as the domestic price increases in China impact imported sulfate ilmenite prices, partially offset by a reduction in European prices to realign them with lower Asian prices.
Rutile and chloride slag (the major chloride feedstocks) are expected to be essentially flat in 2016 before slowly recovering from 2017 onwards.
The zircon sector continues to be impacted by high inventory, excess capacity and supply surpluses and prices are expected to trade in a narrow band in the short to medium term.
Overall TZMI expects a more buoyant market for a number of feedstock products, and especially sulfate ilmenite, in 2017.
For more information regarding TZMI’s Market Update, please contact TZMI CEO Bruce Griffin on +44 758416 338 or bgriffin@tzmi.com and David McCoy on dmccoy@tzmi.com
Ends


  More on (FAM)
Previous Stories
Mike on (FAM)
6/3/2017 Another view of FinnAust.
2/3/2017 Setting it straight on FAM.
22/2/2017 Shorts down and stumbling.
20/2/2017 Getting ready to run at FinnAust.
10/2/2017 Buyer in for FAM.
30/1/2017 Getting the resource together.
9/12/2016 FinnAust in funds.
22/11/2016 Good news at FinnAust.
18/11/2016 Bullish ilmenite report should help FinnAust.
11/11/2016 A gamble on the way up.
24/10/2016 Gamble in Greenland.
14/10/2016 A global great?
5/10/2016 A cool cold gamble.


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