Indium prices dive USD100 in 7 days
2005-04-01 09:58:27 【Print】
BEIJING (Asian Metal) 1 Apr 05 – Due to a severe lack of interest, the indium market dived again this week to around RMB8,300-8,500/kg for domestic sales and USD900-920/kg for export. Last week’s prices were around RMB9,000-9,200/kg and USD995-1,025/kg, a decline of some RMB700/kg or USD100/kg. Market participants are saying that the price may soon slip to USD850/kg.
"The price has slipped too fast. The situation is out of most people's expectations,” an official from a major indium smelter in South China told Asian Metal. “I believe current workable prices should be around RMB8,500/kg. It is really difficult for people who hold stock to find a buyer."
According to the source, the current prevailing price for crude indium 99% is around RMB7,400/kg, a significant drop from RMB8,300/kg late last week. "No buyer has any interest in such a slipping market, but rather only watch and wait."
The source insists on USD1,050/kg for its 99.995%min indium. "I know that’s hard for buyers to accept, and consequently we haven’t received any indium orders in the past two weeks. However, we won’t voluntarily lower the price, as we have sufficient financial support to keep some stock," said the source.
The highest price the smelter received was USD1,100/kg for 100kg of indium concluded at the beginning of March and delivered to South Korea.
With a production capacity of around 30tpy, the smelter currently produces only a little over 1tpm, half of which is tied to long-term orders. "Even if the price stays low for two months, we have no worry. 1-2t of stock is not a problem for us," said the source.
The smelter produced 15-16t of indium in 2004.
The source takes very positive attitude for the future market. "The price re-adjustment is very normal. The only problem is when the price stops dropping to the point where the market price gets support. Anyway, we believe that a price rebound is only a matter of time," the source said.
The smelter's target price for the next hike, if possible, is USD1,500/kg. "If the price really climbs over USD1,000/kg next time, USD1,200/kg would be only a small barrier."
A trader from South China claims that the price has slid too fast to be imaginable. "Late last week, suppliers refused to accept prices of USD990/kg. Early this week, they quoted USD960-970/kg, contracting at around USD950/kg. Now, even suppliers quote a price of USD900/kg, they cannot find a buyer," said the trader.
Although few deals were heard of, the trader thought the current export price might be around USD910/kg.
Insiders claim that it is too early to talk about possible support or a bottom price for this round of slipping, but if any, USD800 would be much more possible.
According to industry experts, some market participants have held too much stock in the past two or three months, hoping for a higher price level. Many of these participants -- who were duped by the false phenomenon -- thought that the indium market was really in great shortage.
During the period before and after the Spring Festival, western traders accumulated large stocks anticipating possible higher prices. The sudden price slip, since 10 March, has left them in a very hard position. However, well-informed industry participants in China have already closed out their stocks to cash in on the high prices seen later February and early March.
