Japan Chemical Trading Blog

The latest chemical trading industry insights from Japan, Asia and the world, reported by the President of Daishin Corporation, Masa Oguchi.

Rare Metal Prices Fall

Crude oil, natural gas, grain, coal, iron ore, base metal, precious metal,
real estate, dairy, charge at a hostess bar in Osaka Shinchi … prices on
anything and everything have been falling due to the worldwide recession;
the price falls for rare metals are devastating as well. Today, I would like
to look at the falling prices of the rare metals in which we trade.

In retrospect, prices of resources have greatly increased from about 10
years ago owing to the expanding demand in China. Crude steel production is
one of the indexes that shows how the world has changed in the last 10 to 15
years. Crude steel production in the world has doubled from around 2000 as
China rapidly increased production (about 800 million tons in 2000 to 1,600
million tons in 2014). Is the current amount of crude steel production
adequate when considering the current world population and its rate of
increase in future? If it is a more than adequate quantity, it must be a
“bubble” and will adjust over time.
In the meanwhile, the prices of base metals such as copper and crude oil
have also significantly increased. The prices of rare metals have increased
as well, reflecting China’s increasing demands in the last 10 years.
Especially, rare metals are prone to be an object of speculation and
price-fixing so that the prices of many of them increased about 5 or 10
times than those of a dozen years ago. Their declining pace is sharp, too.
Dealers who sell inventory cannot avoid selling them at prices lower than
the cost.

Let’s take a look at the recent situation of several rare metals:

. Bismuth
Its price was more than USD12 per pound a year ago. The price dropped to
around USD5 now. Metal Bulletin on September 11 said the price had slightly
recovered from USD4.8 to USD4.9. Almost all of the raw materials of bismuth,
produced as a byproduct during lead mineral processing, come from China, and
its offering prices to Japan have bounced back somewhat lately. Bismuth is
used as an additive for free-cutting steel, or in electronic component
materials for condensers and medicines. Since the demand for industrial use
has generally eased, we need to watch carefully to know whether the current
increase in price is a technical rally or an initial stage of full-scale
inversion.

. Selenium
Its price was more than USD23 per pound a year ago. The price has now
dropped to around USD10. Selenium is traditionally used in glass coloring,
electronic component material, feed, agriculture and pigment, but its usage
as an electrolytic manganese additive increased mainly in China about 10
years ago. Accordingly, the prices, at a point, tentatively increased more
than 10 times from the former USD5 or so. The prices have dropped to below a
half in the last 6 months due to poor demand in the manganese industry in
China. Will the price go back to the levels before the demand increased from
the manganese industry, which exceeded 40% of the total demand of selenium
at the peak?

. Tellurium
Its price was more than USD100 per kilogram 6 months ago. The price has now
dropped below USD50. We expected that the demand for cadmium telluride for
thin-film solar panels would increase, and actually its price was as high as
USD400 in 2011, but 4 years later, its price became about one-tenth of that.
Tellurium is used for Peltier devices, free-cutting steel additives and
rubber chemical along with solar panels.

. Indium
Its price was around USD700 per kilogram a year ago. The price has now
dropped to around USD300. Indium is produced as a byproduct of zinc and used
for transparent electrodes for liquid crystal panels. The price has
continued to fall recently as people are aware of the risk, such as
inventory release by the rare metal exchange in China, the Fanya Metal
Exchange, which I will mention later.

More than 10 rare metals are traded on the Fanya Metal Exchange (Kunming
City in Yunnan Province). According to their website, Fanya Metal Exchange
stores indium at a volume equal to global demand for 3 to 4 years at
designated warehouses, and it had a peculiar presence. However, information
from Chinese trading companies stated that transactions of the main rare
metals such as indium, bismuth and germanium have been suspended since July
this year after an audit by the local authorities at the end of last year.
Some investors had a demonstration to ask for an investigation by the
authorities. It is rumored that an executive of the Exchange had tried to
escape to Canada and was detained by the authorities. Anyway, private
investors who are said to be 70% of all the investors of the Exchange have
held latent losses because further transactions cannot be made for a long
time. It faces growing risks, such as inventory release. However, hearing
such a rumor, we may begin to doubt whether the Exchange has ever had
adequate quality stock in its designated warehouses.

Since the Tulip mania in Holland in 1637, many “bubbles” were created and
burst in the world. How will this rare metal “bubble” be concluded?
In the Tulip mania, once the tulip bulb price reached an incredibly high
level over several years, one day, suddenly, there were no purchasers. Then
the price fell to less than one-hundredth its original level.

Rare Metal Prices Fall

Crude oil, natural gas, grain, coal, iron ore, base metal, precious metal,
real estate, dairy, charge at a hostess bar in Osaka Shinchi … prices on
anything and everything have been falling due to the worldwide recession;
the price falls for rare metals are devastating as well. Today, I would like
to look at the falling prices of the rare metals in which we trade.

In retrospect, prices of resources have greatly increased from about 10
years ago owing to the expanding demand in China. Crude steel production is
one of the indexes that shows how the world has changed in the last 10 to 15
years. Crude steel production in the world has doubled from around 2000 as
China rapidly increased production (about 800 million tons in 2000 to 1,600
million tons in 2014). Is the current amount of crude steel production
adequate when considering the current world population and its rate of
increase in future? If it is a more than adequate quantity, it must be a
“bubble” and will adjust over time.
In the meanwhile, the prices of base metals such as copper and crude oil
have also significantly increased. The prices of rare metals have increased
as well, reflecting China’s increasing demands in the last 10 years.
Especially, rare metals are prone to be an object of speculation and
price-fixing so that the prices of many of them increased about 5 or 10
times than those of a dozen years ago. Their declining pace is sharp, too.
Dealers who sell inventory cannot avoid selling them at prices lower than
the cost.

Let’s take a look at the recent situation of several rare metals:

. Bismuth
Its price was more than USD12 per pound a year ago. The price dropped to
around USD5 now. Metal Bulletin on September 11 said the price had slightly
recovered from USD4.8 to USD4.9. Almost all of the raw materials of bismuth,
produced as a byproduct during lead mineral processing, come from China, and
its offering prices to Japan have bounced back somewhat lately. Bismuth is
used as an additive for free-cutting steel, or in electronic component
materials for condensers and medicines. Since the demand for industrial use
has generally eased, we need to watch carefully to know whether the current
increase in price is a technical rally or an initial stage of full-scale
inversion.

. Selenium
Its price was more than USD23 per pound a year ago. The price has now
dropped to around USD10. Selenium is traditionally used in glass coloring,
electronic component material, feed, agriculture and pigment, but its usage
as an electrolytic manganese additive increased mainly in China about 10
years ago. Accordingly, the prices, at a point, tentatively increased more
than 10 times from the former USD5 or so. The prices have dropped to below a
half in the last 6 months due to poor demand in the manganese industry in
China. Will the price go back to the levels before the demand increased from
the manganese industry, which exceeded 40% of the total demand of selenium
at the peak?

. Tellurium
Its price was more than USD100 per kilogram 6 months ago. The price has now
dropped below USD50. We expected that the demand for cadmium telluride for
thin-film solar panels would increase, and actually its price was as high as
USD400 in 2011, but 4 years later, its price became about one-tenth of that.
Tellurium is used for Peltier devices, free-cutting steel additives and
rubber chemical along with solar panels.

. Indium
Its price was around USD700 per kilogram a year ago. The price has now
dropped to around USD300. Indium is produced as a byproduct of zinc and used
for transparent electrodes for liquid crystal panels. The price has
continued to fall recently as people are aware of the risk, such as
inventory release by the rare metal exchange in China, the Fanya Metal
Exchange, which I will mention later.

More than 10 rare metals are traded on the Fanya Metal Exchange (Kunming
City in Yunnan Province). According to their website, Fanya Metal Exchange
stores indium at a volume equal to global demand for 3 to 4 years at
designated warehouses, and it had a peculiar presence. However, information
from Chinese trading companies stated that transactions of the main rare
metals such as indium, bismuth and germanium have been suspended since July
this year after an audit by the local authorities at the end of last year.
Some investors had a demonstration to ask for an investigation by the
authorities. It is rumored that an executive of the Exchange had tried to
escape to Canada and was detained by the authorities. Anyway, private
investors who are said to be 70% of all the investors of the Exchange have
held latent losses because further transactions cannot be made for a long
time. It faces growing risks, such as inventory release. However, hearing
such a rumor, we may begin to doubt whether the Exchange has ever had
adequate quality stock in its designated warehouses.

Since the Tulip mania in Holland in 1637, many “bubbles” were created and
burst in the world. How will this rare metal “bubble” be concluded?
In the Tulip mania, once the tulip bulb price reached an incredibly high
level over several years, one day, suddenly, there were no purchasers. Then
the price fell to less than one-hundredth its original level.

Current Circumstances of Japanese Refining Manufacturers and the Weak Yen

Today, I am resuming posting on the weblog after a long interval.

During the last six months while I was not posting on the weblog, the slump in the Chinese economy has become apparent. Since China is the biggest consumer of major metals and rare metals, their worldwide surplus tended to increase, while their international market prices fell drastically along with the major impact of other external factors such as the high US dollar rate, the Greek debt crisis and low prices of crude oil. According to the information from a Japanese trading company specialized in chemicals for domestic use, domestic demand for them in the manufacturing of automobiles, building materials and electric wires generally dropped altogether.

On the other hand, the USD/JPY exchange rate has reached USD1=JPY125 owing to the speculation about a rise in U.S. interest rates and the Bank of Japan’s monetary easing policy.

Since the exchange rate a year ago (August 11, 2014) was USD1= JPY102, the yen has dropped more than 20% in a year.

The effect of a weaker yen was so great that it drove away the global/domestic recession and the profits of Japanese refining manufacturers for the April-June period generally improved year on year.

This is because both TC (Treatment Charge) and RC (Refining Charge), processing charge earnings of refining businesses, are paid in USD, and the weaker the yen becomes, the more the earnings become calculated in yen.

In other words, the positive effects of the weaker yen surpassed the negative effects of the international metals market softening.

Ordinary profits of refining manufacturers for the April-June period are as follows:

Sumitomo Metal Industries: approx. 293 million dollars (up 36%)
Mitsubishi Materials: approx. 137 million dollars (down 1.9%)
JX Nippon Mining & Metals Corporation: approx. 125 million dollars (up 59.8%)
Dowa HD: approx. 96 million dollars (up 17.8%)
Mitsui Mining & Smelting: approx. 50 million dollars (up 4.6%)
Nittetsu Mining: approx. 24 million dollars (up 33.1%)
Toho Zinc: approx. 20 million dollars (up 153%)
Furukawa: approx. 17 million dollars (up 69.4%)
(USD1 = JPY125)

The current exchange rate is USD1= JPY125; in 2011 it once reached USD1= JPY75, a devaluation of more than 60%.

On August 10, the Ministry of Finance of Japan announced that the current account surplus for Japan was 8,183.5 billion yen in the first half of this year, the largest after the Great East Japan Earthquake, which caused the trade deficit, to significantly reduce to 422 billion yen.

The weaker yen that resulted from quantitative easing, which the Bank of Japan is adopting to raise Japan consumer prices to realize an inflation rate of about 2%, improved the trade balance of exporting companies in Japan.

However, let’s not forget that this is a policy that has a risk of hyperinflation.

The debt of the Japanese government has already exceeded 1,000 trillion yen.

Current Circumstances of Japanese Refining Manufacturers and the Weak Yen

Today, I am resuming posting on the weblog after a long interval.

During the last six months while I was not posting on the weblog, the slump in the Chinese economy has become apparent. Since China is the biggest consumer of major metals and rare metals, their worldwide surplus tended to increase, while their international market prices fell drastically along with the major impact of other external factors such as the high US dollar rate, the Greek debt crisis and low prices of crude oil. According to the information from a Japanese trading company specialized in chemicals for domestic use, domestic demand for them in the manufacturing of automobiles, building materials and electric wires generally dropped altogether.

On the other hand, the USD/JPY exchange rate has reached USD1=JPY125 owing to the speculation about a rise in U.S. interest rates and the Bank of Japan’s monetary easing policy.

Since the exchange rate a year ago (August 11, 2014) was USD1= JPY102, the yen has dropped more than 20% in a year.

The effect of a weaker yen was so great that it drove away the global/domestic recession and the profits of Japanese refining manufacturers for the April-June period generally improved year on year.

This is because both TC (Treatment Charge) and RC (Refining Charge), processing charge earnings of refining businesses, are paid in USD, and the weaker the yen becomes, the more the earnings become calculated in yen.

In other words, the positive effects of the weaker yen surpassed the negative effects of the international metals market softening.

Ordinary profits of refining manufacturers for the April-June period are as follows:

Sumitomo Metal Industries: approx. 293 million dollars (up 36%)
Mitsubishi Materials: approx. 137 million dollars (down 1.9%)
JX Nippon Mining & Metals Corporation: approx. 125 million dollars (up 59.8%)
Dowa HD: approx. 96 million dollars (up 17.8%)
Mitsui Mining & Smelting: approx. 50 million dollars (up 4.6%)
Nittetsu Mining: approx. 24 million dollars (up 33.1%)
Toho Zinc: approx. 20 million dollars (up 153%)
Furukawa: approx. 17 million dollars (up 69.4%)
(USD1 = JPY125)

The current exchange rate is USD1= JPY125; in 2011 it once reached USD1= JPY75, a devaluation of more than 60%.

On August 10, the Ministry of Finance of Japan announced that the current account surplus for Japan was 8,183.5 billion yen in the first half of this year, the largest after the Great East Japan Earthquake, which caused the trade deficit, to significantly reduce to 422 billion yen.

The weaker yen that resulted from quantitative easing, which the Bank of Japan is adopting to raise Japan consumer prices to realize an inflation rate of about 2%, improved the trade balance of exporting companies in Japan.

However, let’s not forget that this is a policy that has a risk of hyperinflation.

The debt of the Japanese government has already exceeded 1,000 trillion yen.

RECENT LITHIUM TRENDS

Recently in Japan, while shares have been rising due to the effects of the monetary easing measures of the Bank of Japan, the actual economy seems to still be struggling.
Throughout the world, the prices of many base metals and minor metals, which we handle, have been dropping as well, perhaps owing to the effects of the economic slump in Europe and China.
Nevertheless, the price of lithium (lithium carbonate) has been rising.
Needless to say, lithium’s usage in lithium-ion batteries is focused upon; the demand for lithium-ion batteries is about 14,000 tons, against 18,000 tons for the total domestic demand in Japan, showing a high growth rate during these years (estimated figures in 2014).
According to the United States Geological Survey, about 35,000 tons of lithium is produced in the world (Li, 2013); an oligopoly market is shared by three big makers: SQM (Chile) Rockwood Lithium (former Chemetall, Germany) and FMC (U.S.A.), which know the way of impurity separation to use salt water from salt lakes as raw material,.

As we mentioned before, Sumitomo Metal Mining is reinforcing its production facilities of lithium nickelate for positive-electrode material for lithium-ion batteries for Panasonic. The website of Sumitomo Metal Mining reports as follows: they anticipated a further increase of lithium-ion battery demand for the 4-door sedan, “Model S” of Tesla Motors of the U.S., so they invested 4.8 billion Japanese yen (approx. USD 48 million) by the summer in 2014 to increase the production of lithium nickelate from 300 tons to 850 tons a month and they will further increase the production from 850 tons to 1,850 tons a month, at 15 billion Japanese yen (approx. USD 150 million), by the winter of this year.

We are not sure whether or not the demand for Panasonic lithium-ion batteries will increase in the future; however, we are sure that the quantity of lithium Japan imports will increase for the moment.
That’s why we checked the customs clearance statistics of Japan (lithium carbonate) and found out, as we expected, the quantity of lithium Japan imported in 2014 rose to 12,107 tons from 8,215 tons in 2013; a 47% rise.
The unit price in 2014 has increased as well compared to that in 2013 and the unit price in 2015 is still higher (JPY 527 per kg in 2013, JPY 544 per kg in 2014, JPY 617 per kg in 2015).
FMC, U.S., declares on its website that they raised the lithium salts price by 10%, including lithium carbonate, as of December 1. The website also says “The increases are necessary to offset continued rising costs of raw materials and operational cost pressures at our Argentina facility.” We interpret this as international demand is becoming tighter because big consumers such as China, Korea and Japan need it more and more.

In the industry, SQM in Chile is rumored to not be producing enough lithium, therefore, people are feeling uneasy.
There are some factors to ease the supply and demand balance; a new lithium carbonate project in Salar de Olaroz, Argentina, which Toyota Tsusho Corp., Japan, has been developing since 2010.
The website of the company says it will start full-scale production of lithium in late 2014; 17,500 tons a year, in the initial plan.
It seems there is no detailed publicity of the current status of the project as of now; 17,500 tons can cope with the domestic demand of Japan, so that its actual shipment may become one of the factors to ease the supply and demand balance.
Those subscribers who are in the lithium salts business should watch the Toyota Tsusho project.

RECENT LITHIUM TRENDS

Recently in Japan, while shares have been rising due to the effects of the monetary easing measures of the Bank of Japan, the actual economy seems to still be struggling.
Throughout the world, the prices of many base metals and minor metals, which we handle, have been dropping as well, perhaps owing to the effects of the economic slump in Europe and China.
Nevertheless, the price of lithium (lithium carbonate) has been rising.
Needless to say, lithium’s usage in lithium-ion batteries is focused upon; the demand for lithium-ion batteries is about 14,000 tons, against 18,000 tons for the total domestic demand in Japan, showing a high growth rate during these years (estimated figures in 2014).
According to the United States Geological Survey, about 35,000 tons of lithium is produced in the world (Li, 2013); an oligopoly market is shared by three big makers: SQM (Chile) Rockwood Lithium (former Chemetall, Germany) and FMC (U.S.A.), which know the way of impurity separation to use salt water from salt lakes as raw material,.

As we mentioned before, Sumitomo Metal Mining is reinforcing its production facilities of lithium nickelate for positive-electrode material for lithium-ion batteries for Panasonic. The website of Sumitomo Metal Mining reports as follows: they anticipated a further increase of lithium-ion battery demand for the 4-door sedan, “Model S” of Tesla Motors of the U.S., so they invested 4.8 billion Japanese yen (approx. USD 48 million) by the summer in 2014 to increase the production of lithium nickelate from 300 tons to 850 tons a month and they will further increase the production from 850 tons to 1,850 tons a month, at 15 billion Japanese yen (approx. USD 150 million), by the winter of this year.

We are not sure whether or not the demand for Panasonic lithium-ion batteries will increase in the future; however, we are sure that the quantity of lithium Japan imports will increase for the moment.
That’s why we checked the customs clearance statistics of Japan (lithium carbonate) and found out, as we expected, the quantity of lithium Japan imported in 2014 rose to 12,107 tons from 8,215 tons in 2013; a 47% rise.
The unit price in 2014 has increased as well compared to that in 2013 and the unit price in 2015 is still higher (JPY 527 per kg in 2013, JPY 544 per kg in 2014, JPY 617 per kg in 2015).
FMC, U.S., declares on its website that they raised the lithium salts price by 10%, including lithium carbonate, as of December 1. The website also says “The increases are necessary to offset continued rising costs of raw materials and operational cost pressures at our Argentina facility.” We interpret this as international demand is becoming tighter because big consumers such as China, Korea and Japan need it more and more.

In the industry, SQM in Chile is rumored to not be producing enough lithium, therefore, people are feeling uneasy.
There are some factors to ease the supply and demand balance; a new lithium carbonate project in Salar de Olaroz, Argentina, which Toyota Tsusho Corp., Japan, has been developing since 2010.
The website of the company says it will start full-scale production of lithium in late 2014; 17,500 tons a year, in the initial plan.
It seems there is no detailed publicity of the current status of the project as of now; 17,500 tons can cope with the domestic demand of Japan, so that its actual shipment may become one of the factors to ease the supply and demand balance.
Those subscribers who are in the lithium salts business should watch the Toyota Tsusho project.

Tin prices fall

Tin has been used widely from ancient times; bronze is a mixture of copper and tin widely used during the Bronze Age, which started around 3,500 BCE.
Bronze has the merits of a lower melting point and becoming harder than copper because it contains tin, which has a low melting point (232 degrees centigrade).
However, tin consumption decreased when iron, which is cheaper and harder than bronze, started to be widely used; then, recently, increasing production of tin plates or tinned iron plates, since iron is apt to rust by itself, augmented the demand for tin.
Tinned iron plates don’t rust easily since tin has a smaller ionization tendency, so it is hard to melt.

As it was recognized as a militarily important material, international cartels were formed to strategically stock it and to maintain a steady supply to the market.
Because of its high price, substitutes have been aggressively developed, so long-term demand for tin has dropped. For instance, plastic bottles, cartons and aluminum have caused tin plate demand to lose ground in the field of drink containers.
Presently, the demand for tin in tin plates is about 15 to 20% of the total amount.
But demand for tin itself has been increasing again as a substitute for lead due to the recent lead-free trend. For example, tin has been increasingly required to be used in lead-free solder instead of lead, which, with its low melting point, used to be raw solder material in the electronics industry. Around 50 to 60% of the total production is for solder.
It is used in organic tin compound (10 to 15%) for vinyl chloride stabilizers and ITO, a compound with indium, used as transparent electrodes in liquid crystal panels.

The website of Nippon Steel & Sumikin Stainless Steel Corporation reports that it has implemented a breakthrough technology that drastically improves the corrosion resistance of ferritic (chromium-based) stainless steel by adding a tiny amount of tin (Sn) and, based on this technology, it developed the world’s first Sn-added high-purity ferritic stainless steel, “FW series,” which improves corrosion resistance while improving workability as well by decreasing the amount of chromium (Cr), the element of stainless steel. We expect demand will increase in the future.

China and Indonesia are the main producers, accounting for about 70% of global production. Large-scale mines are scattered throughout the world: Southeast Asia, China, South America and Australia. Ores are beginning to be exported from Myanmar, where sanctions have just been lifted, to China. In addition, Australia, Peru, Bolivia, Russia and African countries are said to be developing mines and increasing production.
A medium-term prospective says demand may exceed supply; however, prices have been down recently and LME, one of the world’s major indexes, posted its lowest price in two and a half years on March 2nd.

We export to the world high-quality tin compounds, including stannic chloride, stannic oxide, stannous chloride, stannous sulfate, potassium stannate, sodium stannate, stannous fluoroborate, and stannous pyrophosphate. We have fewer inquiries nowadays except for catalysts for medical purposes, possibly due to price decreases, so business is slow. Nevertheless, tin is a metal whose price has traditionally changed greatly and we have to constantly monitor how major producers such as Indonesia move.

Tin prices fall

Tin has been used widely from ancient times; bronze is a mixture of copper and tin widely used during the Bronze Age, which started around 3,500 BCE.
Bronze has the merits of a lower melting point and becoming harder than copper because it contains tin, which has a low melting point (232 degrees centigrade).
However, tin consumption decreased when iron, which is cheaper and harder than bronze, started to be widely used; then, recently, increasing production of tin plates or tinned iron plates, since iron is apt to rust by itself, augmented the demand for tin.
Tinned iron plates don’t rust easily since tin has a smaller ionization tendency, so it is hard to melt.

As it was recognized as a militarily important material, international cartels were formed to strategically stock it and to maintain a steady supply to the market.
Because of its high price, substitutes have been aggressively developed, so long-term demand for tin has dropped. For instance, plastic bottles, cartons and aluminum have caused tin plate demand to lose ground in the field of drink containers.
Presently, the demand for tin in tin plates is about 15 to 20% of the total amount.
But demand for tin itself has been increasing again as a substitute for lead due to the recent lead-free trend. For example, tin has been increasingly required to be used in lead-free solder instead of lead, which, with its low melting point, used to be raw solder material in the electronics industry. Around 50 to 60% of the total production is for solder.
It is used in organic tin compound (10 to 15%) for vinyl chloride stabilizers and ITO, a compound with indium, used as transparent electrodes in liquid crystal panels.

The website of Nippon Steel & Sumikin Stainless Steel Corporation reports that it has implemented a breakthrough technology that drastically improves the corrosion resistance of ferritic (chromium-based) stainless steel by adding a tiny amount of tin (Sn) and, based on this technology, it developed the world’s first Sn-added high-purity ferritic stainless steel, “FW series,” which improves corrosion resistance while improving workability as well by decreasing the amount of chromium (Cr), the element of stainless steel. We expect demand will increase in the future.

China and Indonesia are the main producers, accounting for about 70% of global production. Large-scale mines are scattered throughout the world: Southeast Asia, China, South America and Australia. Ores are beginning to be exported from Myanmar, where sanctions have just been lifted, to China. In addition, Australia, Peru, Bolivia, Russia and African countries are said to be developing mines and increasing production.
A medium-term prospective says demand may exceed supply; however, prices have been down recently and LME, one of the world’s major indexes, posted its lowest price in two and a half years on March 2nd.

We export to the world high-quality tin compounds, including stannic chloride, stannic oxide, stannous chloride, stannous sulfate, potassium stannate, sodium stannate, stannous fluoroborate, and stannous pyrophosphate. We have fewer inquiries nowadays except for catalysts for medical purposes, possibly due to price decreases, so business is slow. Nevertheless, tin is a metal whose price has traditionally changed greatly and we have to constantly monitor how major producers such as Indonesia move.

Nickel Shortage, 12 Thousand Tons in 2015

According to the Japan Metal Bulletin on January 30, 2015, Sumitomo Metal Mining revised its worldwide nickel supply and demand prediction for the calendar year 2015 to be a supply shortage of 12 thousand tons, reducing the shortage from the previous prediction of 32 thousand tons.

Nickel is a rare metal used for stainless steel, plating, batteries and catalysts, and is produced mainly in Australia, Russia, Canada, Indonesia and the Philippines.
Recently, the Ambatovy Nickel project in Madagascar, jointly run by Canada, Korea and Japan, is nearing full production (60 thousand tons a year) and will contribute to an increase in the global production amount.
Other new projects such as in New Caledonia (Goro Nickel, 60 thousand tons a year), Brazil (Onca Puma, 50 thousand tons a year) and the Philippines (Taganito, 30 thousand a year) have also increased production.
As for demand, China tops the list as the main consuming country (a thousand tons a year), followed by the U.S., Japan, Germany and Korea.

Recently, nickel demand has been globally increasing, especially in China, primarily for stainless steel and special alloys.
Panasonic announced that its lithium-ion battery to be sold for the “Model S” electric car of Tesla Motors of the U.S., which has a longer cruising distance than previous electric cars (500 kilometers when fully charged), uses nickel as a positive-electrode material.
Sumitomo Metal Mining, as the provider of its material, Lithium Nickelate, is investing 15 billion yen in its production facilities, increasing output from 850 tons to 1,850 tons to cope with this demand expansion.
New facilities are scheduled to be completed in December 2015. (Sumitomo Metal Mining supply Lithium Nickelate to Panasonic and Panasonic supply lithium-ion battery to Tesla Motors.)

With these actions, even though the above new projects are operating successfully and also China has increased production, a nickel shortage is anticipated in 2015, a reversal from a projected surplus in 2014.
The projected supply in 2015 is 1,990 thousand tons against 1,961 thousand tons in the 2014 projection.
Projected demand in 2015 is 2,002 thousand tons against 1,925 thousand tons in the 2014 projection.
Therefore, some say that the prices will about-turn and rise when the Chinese ore inventory runs out; however, the actual prices keep falling and the nickel inventory of the London Metal Exchange (LME) is continuing at a record high level of over 420 thousand tons.
We sell nickel compounds made in Japan, including nickel acetate, nickel carbonate, nickel chloride, nickel hydroxide, nickel nitrate, nickel sulfamate and nickel sulfate to our customers all over the world, and we have a steady stream of inquiries from overseas, helped by a weaker Japanese yen.

The prices of natural resources have fallen sharply, with crude oil at the top of the list; nevertheless, I don’t predict that the value of infinite resources will drop over the mid and long term as long as the world’s population keeps increasing, people keep aspiring for a high-quality life and technological innovation continues.

Nickel Shortage, 12 Thousand Tons in 2015

According to the Japan Metal Bulletin on January 30, 2015, Sumitomo Metal Mining revised its worldwide nickel supply and demand prediction for the calendar year 2015 to be a supply shortage of 12 thousand tons, reducing the shortage from the previous prediction of 32 thousand tons.

Nickel is a rare metal used for stainless steel, plating, batteries and catalysts, and is produced mainly in Australia, Russia, Canada, Indonesia and the Philippines.
Recently, the Ambatovy Nickel project in Madagascar, jointly run by Canada, Korea and Japan, is nearing full production (60 thousand tons a year) and will contribute to an increase in the global production amount.
Other new projects such as in New Caledonia (Goro Nickel, 60 thousand tons a year), Brazil (Onca Puma, 50 thousand tons a year) and the Philippines (Taganito, 30 thousand a year) have also increased production.
As for demand, China tops the list as the main consuming country (a thousand tons a year), followed by the U.S., Japan, Germany and Korea.

Recently, nickel demand has been globally increasing, especially in China, primarily for stainless steel and special alloys.
Panasonic announced that its lithium-ion battery to be sold for the “Model S” electric car of Tesla Motors of the U.S., which has a longer cruising distance than previous electric cars (500 kilometers when fully charged), uses nickel as a positive-electrode material.
Sumitomo Metal Mining, as the provider of its material, Lithium Nickelate, is investing 15 billion yen in its production facilities, increasing output from 850 tons to 1,850 tons to cope with this demand expansion.
New facilities are scheduled to be completed in December 2015. (Sumitomo Metal Mining supply Lithium Nickelate to Panasonic and Panasonic supply lithium-ion battery to Tesla Motors.)

With these actions, even though the above new projects are operating successfully and also China has increased production, a nickel shortage is anticipated in 2015, a reversal from a projected surplus in 2014.
The projected supply in 2015 is 1,990 thousand tons against 1,961 thousand tons in the 2014 projection.
Projected demand in 2015 is 2,002 thousand tons against 1,925 thousand tons in the 2014 projection.
Therefore, some say that the prices will about-turn and rise when the Chinese ore inventory runs out; however, the actual prices keep falling and the nickel inventory of the London Metal Exchange (LME) is continuing at a record high level of over 420 thousand tons.
We sell nickel compounds made in Japan, including nickel acetate, nickel carbonate, nickel chloride, nickel hydroxide, nickel nitrate, nickel sulfamate and nickel sulfate to our customers all over the world, and we have a steady stream of inquiries from overseas, helped by a weaker Japanese yen.

The prices of natural resources have fallen sharply, with crude oil at the top of the list; nevertheless, I don’t predict that the value of infinite resources will drop over the mid and long term as long as the world’s population keeps increasing, people keep aspiring for a high-quality life and technological innovation continues.

Indium Prices Down

Nowadays, I report on more and more price-down news, whether it is organic chemical products or others.
Today, I am reporting about indium.

Indium is a soft, silver-white rare metal, produced as a by-product of zinc.
It is processed into indium tin oxide (standard configuration: 90% In2O3, 10% SnO2, commonly known as ITO), which is used as a target material in the production of LCDs, touch screens, solar cells, and organic ELs.
There are other metals that have better conductivity than indium; however, it also features transparency in the form of thin film. Recently, the demand for indium to be used in the above-mentioned final products which require these features has increased.
It also has excellent malleability and ductility and is not subject to RoHS, so it can be used as lead-free solder material as well.

Toyoha Mine (Sapporo, Hokkaido, Japan), a subsidiary of Nippon Mining (currently JX Nippon Mining & Metals Corporation), used to produce the most indium in the world, but the mine closed in 2006 because of minable ore depletion (the immediate cause of closure was that the company couldn’t use any more dynamite for blasting purposes because of geothermal energy activities).
Indium is now produced by Dowa Metals & Mining, which has the largest zinc smelter in Japan, and other companies such as Sumitomo Metal Mining, Mitsui Mining & Smelting, JX Nippon Mining & Metals, Mitsubishi Materials, Shinko Chemical and Asahi Pretec.

Globally speaking, in recent years, China is the biggest metal producing country.
Approximately 700 tons a year of virgin base metal are produced in the world.
Demand from Japan used to be by far the biggest (80% of it was for ITO target material), but it has been dropping since around 2012 because of many reasons such as progress in recycling, the market share increase of other countries’ products (e.g., Samsung Corning, Korea) associated with the declining competitiveness of Japanese manufacturers, international relocation of the production bases of Japanese companies, diffusion of substitutes, etc.
As for the prices, Japan Metal Bulletin reported on January 27 that the market rates of low grade indium for solder and alloy are 76,000 Japanese yen to 81,000 Japanese yen.

Though indium prices continue to fall globally, the prices in Japan have been rather stable as a weak yen offsets dollar price falls.
Nevertheless, indium prices in Japan may drop in the future since the Chinese market has been soft and has dropped more than 25% since November, and the prices on the London Metal Bulletin continued to fall on January 28 from USD640 to USD550 per kilogram.
Since this anticipation of low prices may bring restrained buying, many people expect the indium market to continue to fall unless the sense of uncertainty in the world economy diminishes.

Indium Prices Down

Nowadays, I report on more and more price-down news, whether it is organic chemical products or others.
Today, I am reporting about indium.

Indium is a soft, silver-white rare metal, produced as a by-product of zinc.
It is processed into indium tin oxide (standard configuration: 90% In2O3, 10% SnO2, commonly known as ITO), which is used as a target material in the production of LCDs, touch screens, solar cells, and organic ELs.
There are other metals that have better conductivity than indium; however, it also features transparency in the form of thin film. Recently, the demand for indium to be used in the above-mentioned final products which require these features has increased.
It also has excellent malleability and ductility and is not subject to RoHS, so it can be used as lead-free solder material as well.

Toyoha Mine (Sapporo, Hokkaido, Japan), a subsidiary of Nippon Mining (currently JX Nippon Mining & Metals Corporation), used to produce the most indium in the world, but the mine closed in 2006 because of minable ore depletion (the immediate cause of closure was that the company couldn’t use any more dynamite for blasting purposes because of geothermal energy activities).
Indium is now produced by Dowa Metals & Mining, which has the largest zinc smelter in Japan, and other companies such as Sumitomo Metal Mining, Mitsui Mining & Smelting, JX Nippon Mining & Metals, Mitsubishi Materials, Shinko Chemical and Asahi Pretec.

Globally speaking, in recent years, China is the biggest metal producing country.
Approximately 700 tons a year of virgin base metal are produced in the world.
Demand from Japan used to be by far the biggest (80% of it was for ITO target material), but it has been dropping since around 2012 because of many reasons such as progress in recycling, the market share increase of other countries’ products (e.g., Samsung Corning, Korea) associated with the declining competitiveness of Japanese manufacturers, international relocation of the production bases of Japanese companies, diffusion of substitutes, etc.
As for the prices, Japan Metal Bulletin reported on January 27 that the market rates of low grade indium for solder and alloy are 76,000 Japanese yen to 81,000 Japanese yen.

Though indium prices continue to fall globally, the prices in Japan have been rather stable as a weak yen offsets dollar price falls.
Nevertheless, indium prices in Japan may drop in the future since the Chinese market has been soft and has dropped more than 25% since November, and the prices on the London Metal Bulletin continued to fall on January 28 from USD640 to USD550 per kilogram.
Since this anticipation of low prices may bring restrained buying, many people expect the indium market to continue to fall unless the sense of uncertainty in the world economy diminishes.

Slight Increase in Exports of Semiconductor Materials from Japan

According to the announcement made by the Japan Society of Newer Metals on their website on December 10th, in the first half of fiscal 2014 (April to September 2014), the shipment value of compound semiconductor materials reached 15.7 billion Japanase yen(approx. USD157 million), 105% up from the previous fiscal year (15 billion yen in the same period in the previous year).

As the readers know very well, a semiconductor is a material that can be an insulator or conductor depending on conditions; therefore, semiconductors are used as materials for many electronic devices, being indispensable to modern technology.
The representative ones are Si, Ge, etc., as single materials, and GaAs, GaP, InP, GeN, CdTe, ZnSe, CdS, GaN, SiC, SiGe, CdZnTe, PbSnTe, HgCdTe, GaAlAs, InGaAs, etc., as compound materials.
GaAs, which counts for the largest market as a compound, is more expensive than Si, features high electron mobility, high-speed operation function, and reduced electric power consumption.
It is used for red LEDs, mobile phones, lasers, etc.

Recently, while exports have kept increasing, the Japanese market has been contracting, and the same tendency continued in the first half of fiscal 2014 (combining domestic sales and exports, the total amount is the same level as the previous year).
The market conditions for the raw material gallium are weak, and we have recently received fewer new inquiries.
Meanwhile, our domestic sales and exports of the other main compound semiconductor raw materials, GaP and InP, have increased.

Slight Increase in Exports of Semiconductor Materials from Japan

According to the announcement made by the Japan Society of Newer Metals on their website on December 10th, in the first half of fiscal 2014 (April to September 2014), the shipment value of compound semiconductor materials reached 15.7 billion Japanase yen(approx. USD157 million), 105% up from the previous fiscal year (15 billion yen in the same period in the previous year).

As the readers know very well, a semiconductor is a material that can be an insulator or conductor depending on conditions; therefore, semiconductors are used as materials for many electronic devices, being indispensable to modern technology.
The representative ones are Si, Ge, etc., as single materials, and GaAs, GaP, InP, GeN, CdTe, ZnSe, CdS, GaN, SiC, SiGe, CdZnTe, PbSnTe, HgCdTe, GaAlAs, InGaAs, etc., as compound materials.
GaAs, which counts for the largest market as a compound, is more expensive than Si, features high electron mobility, high-speed operation function, and reduced electric power consumption.
It is used for red LEDs, mobile phones, lasers, etc.

Recently, while exports have kept increasing, the Japanese market has been contracting, and the same tendency continued in the first half of fiscal 2014 (combining domestic sales and exports, the total amount is the same level as the previous year).
The market conditions for the raw material gallium are weak, and we have recently received fewer new inquiries.
Meanwhile, our domestic sales and exports of the other main compound semiconductor raw materials, GaP and InP, have increased.

The Benzene Price Continues its Substantial Fall

Benzene is a basic petrochemical used as a raw material for resins and adhesives, and JX Nippon Oil and Energy Corporation is the Asian price leader.

According to the company’s news release on January 5th, the price for Asia in January was USD 655 per ton, more than 25 percent lower than the previous month’s price of USD 885 per ton.
It’s a substantial fall, continuing from the previous month, and the lowest price since just after the bankruptcy of Lehman Brothers in June 2009.

The background is considered to be the weak demand for resin raw materials, such as styrene monomer and phenol made from benzene; however, we can conclude that the fall follows the oil price, which is over 50 percent lower than the highest price recorded in July of the previous year (USD 1,430).

The Benzene Price Continues its Substantial Fall

Benzene is a basic petrochemical used as a raw material for resins and adhesives, and JX Nippon Oil and Energy Corporation is the Asian price leader.

According to the company’s news release on January 5th, the price for Asia in January was USD 655 per ton, more than 25 percent lower than the previous month’s price of USD 885 per ton.
It’s a substantial fall, continuing from the previous month, and the lowest price since just after the bankruptcy of Lehman Brothers in June 2009.

The background is considered to be the weak demand for resin raw materials, such as styrene monomer and phenol made from benzene; however, we can conclude that the fall follows the oil price, which is over 50 percent lower than the highest price recorded in July of the previous year (USD 1,430).

Japan’s Housing Loan Interest Rates Hit a Record Low

Happy New Year!
I hope that 2015 will be a good year for the readers of this weblog.
While there is no Christmas holiday in Japan, there is some time off during the New Year’s season, and for this year the calendar was good: many companies had nine consecutive holidays (December 27th to January 4th). Yesterday was the first business day of the new year.

According to the Nikkei Newspaper on December 31st, the housing loan interest rates of three Japanese megabanks (ten-year fixed rate) hit a record low of 0.9 to 1.2 percent.
A friend who recently bought a house says the rate fell to about 0.5 to 0.6 percent at the Internet-based Sony Bank.
It reflects the Japanese trend of not taking risks to borrow money.
As of today, the interest rate of the 10-year government bonds hit a record low of 0.285 percent; however, with such low levels for this vital lending rate, the banks’ management, also, looks difficult.

Japan’s Housing Loan Interest Rates Hit a Record Low

Happy New Year!
I hope that 2015 will be a good year for the readers of this weblog.
While there is no Christmas holiday in Japan, there is some time off during the New Year’s season, and for this year the calendar was good: many companies had nine consecutive holidays (December 27th to January 4th). Yesterday was the first business day of the new year.

According to the Nikkei Newspaper on December 31st, the housing loan interest rates of three Japanese megabanks (ten-year fixed rate) hit a record low of 0.9 to 1.2 percent.
A friend who recently bought a house says the rate fell to about 0.5 to 0.6 percent at the Internet-based Sony Bank.
It reflects the Japanese trend of not taking risks to borrow money.
As of today, the interest rate of the 10-year government bonds hit a record low of 0.285 percent; however, with such low levels for this vital lending rate, the banks’ management, also, looks difficult.

Mitsui Chemicals of Japan and SKC of Korea to Consolidate Polyurethane Material Businesses

On December 22, Mitsui Chemicals, Inc. (MCI) announced the signing of a joint venture agreement to consolidate the polyurethane material businesses of MCI and SKC Co., Ltd. (SKC).
The consolidated company is going to be established in South Korea around April 2015, expecting the sales of USD1,5 billion per year.

Polyurethane is a collective name for polymers that have a urethane bond (-NH・CO・O-) and the major applications of polyurethane foam include automobile seats and heat insulating materials.
The size of the global market is around 10 trillion Japanese Yen (aprox. USD ten billion) per year.

MCI has already decided to stop polyurethane material production at its TDI plant in Kashima and MDI plant in Omuta in 2016 due to declining earnings under the depressed market conditions caused by large-scale addition of facilities in China.
MCI and SKC intend to maximize the synergy effects by establishing a joint venture in South Korea with an ownership of 50% each.
I hope that MCI will be able to improve its financial standing through a series of structural reforms.

Mitsui Chemicals of Japan and SKC of Korea to Consolidate Polyurethane Material Businesses

On December 22, Mitsui Chemicals, Inc. (MCI) announced the signing of a joint venture agreement to consolidate the polyurethane material businesses of MCI and SKC Co., Ltd. (SKC).
The consolidated company is going to be established in South Korea around April 2015, expecting the sales of USD1,5 billion per year.

Polyurethane is a collective name for polymers that have a urethane bond (-NH・CO・O-) and the major applications of polyurethane foam include automobile seats and heat insulating materials.
The size of the global market is around 10 trillion Japanese Yen (aprox. USD ten billion) per year.

MCI has already decided to stop polyurethane material production at its TDI plant in Kashima and MDI plant in Omuta in 2016 due to declining earnings under the depressed market conditions caused by large-scale addition of facilities in China.
MCI and SKC intend to maximize the synergy effects by establishing a joint venture in South Korea with an ownership of 50% each.
I hope that MCI will be able to improve its financial standing through a series of structural reforms.