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.


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Masa Oguchi
President, Daishin Corporation
Born in Nara Prefecture, Japan, in 1973. Currently lives in Osaka.

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Tellurium Price Increase

Tellurium is a rare metal used as the raw material cadmium telluride for thin-film solar cells, as well as for manufacturing Peltier device, optical lens and semiconductors.
Although solar cells made with cadmium telluride are often used in Europe and the U.S. because it is inexpensive, it is rarely used in Japan since it contains cadmium, which is a harmful substance.

The price dropped below USD100 per kg at the end of last year; however, since March this year, it started to rise and has now recovered to nearly USD130.
There is some positive news in the market such as the announcement by 5N Plus (Canada) on May 27 that it renewed an exclusive cadmium telluride delivery agreement, valid until 2019, with First Solar, one of world’s major solar panel manufacturers.
According to Japan Metal Bulletin on July 14, one of copper refinery in Japan stopped their supply recently and supply is getting shorted while the demand is stable.
Because tellurium was traded at the record high price of over USD400 3 years ago, some speculators point out that prices will keep rising. Price movements should be closely watched while monetary easing policies continue around the world.

Tellurium Price Increase

Tellurium is a rare metal used as the raw material cadmium telluride for thin-film solar cells, as well as for manufacturing Peltier device, optical lens and semiconductors.
Although solar cells made with cadmium telluride are often used in Europe and the U.S. because it is inexpensive, it is rarely used in Japan since it contains cadmium, which is a harmful substance.

The price dropped below USD100 per kg at the end of last year; however, since March this year, it started to rise and has now recovered to nearly USD130.
There is some positive news in the market such as the announcement by 5N Plus (Canada) on May 27 that it renewed an exclusive cadmium telluride delivery agreement, valid until 2019, with First Solar, one of world’s major solar panel manufacturers.
According to Japan Metal Bulletin on July 14, one of copper refinery in Japan stopped their supply recently and supply is getting shorted while the demand is stable.
Because tellurium was traded at the record high price of over USD400 3 years ago, some speculators point out that prices will keep rising. Price movements should be closely watched while monetary easing policies continue around the world.

Mitsubishi Rayon to Manufacture MMA in Saudi Arabia and U.S.A.

On June 16, Mitsubishi Rayon announced it is constructing a new MMA (methyl methacrylate monomer) factory (annual production capacity about 250 thousand tons) in the U.S. jointly with Mitsui & Co., Ltd.

The factory is scheduled to start operation in 2018. On June 26, Mitsubishi Rayon further announced it is constructing an MMA factory (annual production capacity about 250 thousand tons of MMA and 40 thousand tons of PMMA) in Saudi Arabia jointly with SABIC and the operation is scheduled to start in mid-2017.

MMA is a raw material for acrylate resin that is highly transparent and impact-resistant and is used for construction materials, water tanks, lighting covers, lamps for automobiles or display windows for cell phones as a substitute for conventional glass.

Mitsubishi Rayon is the world’s No. 1 producer of MMA monomer. Since demand for this material is expected to continue expanding, the company is rapidly setting up strategic global supply bases with its advanced MMA production technology, using low cost raw materials such as ethylene derived from shale gas in the US and gas in Saudi Arabia.
Mitsubishi Chemical Holdings, its parent company, is steadily proceeding with its worldwide strategy.

Mitsubishi Rayon to Manufacture MMA in Saudi Arabia and U.S.A.

On June 16, Mitsubishi Rayon announced it is constructing a new MMA (methyl methacrylate monomer) factory (annual production capacity about 250 thousand tons) in the U.S. jointly with Mitsui & Co., Ltd.

The factory is scheduled to start operation in 2018. On June 26, Mitsubishi Rayon further announced it is constructing an MMA factory (annual production capacity about 250 thousand tons of MMA and 40 thousand tons of PMMA) in Saudi Arabia jointly with SABIC and the operation is scheduled to start in mid-2017.

MMA is a raw material for acrylate resin that is highly transparent and impact-resistant and is used for construction materials, water tanks, lighting covers, lamps for automobiles or display windows for cell phones as a substitute for conventional glass.

Mitsubishi Rayon is the world’s No. 1 producer of MMA monomer. Since demand for this material is expected to continue expanding, the company is rapidly setting up strategic global supply bases with its advanced MMA production technology, using low cost raw materials such as ethylene derived from shale gas in the US and gas in Saudi Arabia.
Mitsubishi Chemical Holdings, its parent company, is steadily proceeding with its worldwide strategy.

Increase in International Prices of Petroleum Products

According to a Nikkei Newspaper article dated June 24th, the “Spot price of naphtha is now around USD990/ton”.
Naphtha is a fraction obtained from crude oil through separation by distillation with a boiling point of 30-180 degree C. In Japan, it is used as a main ingredient for petroleum products such as ethylene.

With crude oil fetching high prices as a result of the growing tension in Iraq, the second largest crude oil producer among OPEC countries, the price of naphtha has also increased by about 6% since the beginning of June.
An increase in naphtha’s price has resulted in the increase in prices of products including polyethylene and benzene.

However, since April, the number of inquiries our company has received from Asian countries overall is on a downward trend and the Asian market including China is currently lacking enthusiasm. Therefore, it may be difficult to expect that the demand will boost up the price.
It is still uncertain whether the price increase will spread to the downstream chemical products in general. If the increase in naphtha price escalates, the profit of chemical manufacturers may be squeezed.

Increase in International Prices of Petroleum Products

According to a Nikkei Newspaper article dated June 24th, the “Spot price of naphtha is now around USD990/ton”.
Naphtha is a fraction obtained from crude oil through separation by distillation with a boiling point of 30-180 degree C. In Japan, it is used as a main ingredient for petroleum products such as ethylene.

With crude oil fetching high prices as a result of the growing tension in Iraq, the second largest crude oil producer among OPEC countries, the price of naphtha has also increased by about 6% since the beginning of June.
An increase in naphtha’s price has resulted in the increase in prices of products including polyethylene and benzene.

However, since April, the number of inquiries our company has received from Asian countries overall is on a downward trend and the Asian market including China is currently lacking enthusiasm. Therefore, it may be difficult to expect that the demand will boost up the price.
It is still uncertain whether the price increase will spread to the downstream chemical products in general. If the increase in naphtha price escalates, the profit of chemical manufacturers may be squeezed.

Iron Ore Price Softening

Price of iron ore is in decline. Spot price for iron ore is now less than USD100 per ton — around 30% down from the beginning of this year.

The production of iron and steel has slowed down in China, the world’s largest iron ore consuming nation, due to the stagnation of economic growth in the country while production is increasing in Australia, the world’s top exporter.

The iron ore stock in China has reached a high level and according to Goldman Sachs, from this year to next year, an increase in excess supply is anticipated.

With the decline of the price, the focus should be on whether the high-cost producers in China will be able to continue to operate, and if major producers will revise their plans to expand the production that have already been announced.

Iron Ore Price Softening

Price of iron ore is in decline. Spot price for iron ore is now less than USD100 per ton — around 30% down from the beginning of this year.

The production of iron and steel has slowed down in China, the world’s largest iron ore consuming nation, due to the stagnation of economic growth in the country while production is increasing in Australia, the world’s top exporter.

The iron ore stock in China has reached a high level and according to Goldman Sachs, from this year to next year, an increase in excess supply is anticipated.

With the decline of the price, the focus should be on whether the high-cost producers in China will be able to continue to operate, and if major producers will revise their plans to expand the production that have already been announced.

Nickel Supply Deficiency

An article on Japan Metal Bulletin dated May 9 states, “Sumitomo Metal Mining expects a supply deficiency in the worldwide balance between nickel supply and demand in 2014, for the first time in 4 years. Demand is estimated to be 1,915,000 tons, up 6.8% from the previous year, and production is estimated to be 1,885,000 tons, down 0.9% from the previous year.”

Nickel is a metal used for stainless steel, plating, and batteries and is mainly produced in Russia, Canada and Indonesia.

Since Indonesia imposed a ban on the export of nickel ore in January for the purpose of developing its domestic smelting and processing industry, the production of nickel has been in decline, leading to an increase in its international price. Substitute nickel ore produced in the Philippines has doubled in price compared with beginning of this year.

Meanwhile, production of stainless crude steel, a major application of nickel, has been steadily growing, led by China, a leading producer of steel, with the exception of the period immediately after the financial crisis.

Nickel Supply Deficiency

An article on Japan Metal Bulletin dated May 9 states, “Sumitomo Metal Mining expects a supply deficiency in the worldwide balance between nickel supply and demand in 2014, for the first time in 4 years. Demand is estimated to be 1,915,000 tons, up 6.8% from the previous year, and production is estimated to be 1,885,000 tons, down 0.9% from the previous year.”

Nickel is a metal used for stainless steel, plating, and batteries and is mainly produced in Russia, Canada and Indonesia.

Since Indonesia imposed a ban on the export of nickel ore in January for the purpose of developing its domestic smelting and processing industry, the production of nickel has been in decline, leading to an increase in its international price. Substitute nickel ore produced in the Philippines has doubled in price compared with beginning of this year.

Meanwhile, production of stainless crude steel, a major application of nickel, has been steadily growing, led by China, a leading producer of steel, with the exception of the period immediately after the financial crisis.

Molybdenum

The price of molybdenum is increasing. International index LME increased from USD23.50 per kg at the end of March to the latest USD29.50 per kg, an increase by about 25%.

Molybdenum is a metal produced mainly as a by-product of copper and among the main producers are the U.S., Chile, and China. Molybdenum is mainly used as an additive to special steel for automobile use and as a raw material of catalyst.

The price of molybdenum has been on the increase since just after the earthquake in Chile, one of the main producing countries, in early April as well as the background of robust demand led by the stable increase in the automobile production.

Historically, the price of molybdenum had been hovering around at lower than USD10 per kg for a long time until 2000. However, it started to increase around 2002, and before the financial crisis, recorded the highest price in the market at more than USD70 per kg.

Molybdenum

The price of molybdenum is increasing. International index LME increased from USD23.50 per kg at the end of March to the latest USD29.50 per kg, an increase by about 25%.

Molybdenum is a metal produced mainly as a by-product of copper and among the main producers are the U.S., Chile, and China. Molybdenum is mainly used as an additive to special steel for automobile use and as a raw material of catalyst.

The price of molybdenum has been on the increase since just after the earthquake in Chile, one of the main producing countries, in early April as well as the background of robust demand led by the stable increase in the automobile production.

Historically, the price of molybdenum had been hovering around at lower than USD10 per kg for a long time until 2000. However, it started to increase around 2002, and before the financial crisis, recorded the highest price in the market at more than USD70 per kg.

Chile Earthquake and Iodine

On April 24, 2014, the Chemical Daily reported that the main iodine export port had been seriously damaged by the large-scale earthquake in Chile on April 1, and the iodine market price may increase.

Iodine is an element indispensable to mankind; it is used for X-ray contrast media, polarizing plates for liquid crystal displays, medicines, salt additives, etc.

As Chile is the world’s largest iodine producer, and Japan is the second largest, inquiries to Japanese manufacturers are said to have increased.

However, so far, there have been no reports that iodine manufacturing facilities in Chile suffered damage due to the earthquake, and it is not certain whether the earthquake is causing a full-fledged price increase; this will only be known when we learn more details on the situation.

Although the iodine price soared due to a tight supply-demand balance when Japanese manufacturers stopped production for about one month just after the Great East Japan Earthquake in 2011, the market is in a downtrend worldwide recently.

Chile Earthquake and Iodine

On April 24, 2014, the Chemical Daily reported that the main iodine export port had been seriously damaged by the large-scale earthquake in Chile on April 1, and the iodine market price may increase.

Iodine is an element indispensable to mankind; it is used for X-ray contrast media, polarizing plates for liquid crystal displays, medicines, salt additives, etc.

As Chile is the world’s largest iodine producer, and Japan is the second largest, inquiries to Japanese manufacturers are said to have increased.

However, so far, there have been no reports that iodine manufacturing facilities in Chile suffered damage due to the earthquake, and it is not certain whether the earthquake is causing a full-fledged price increase; this will only be known when we learn more details on the situation.

Although the iodine price soared due to a tight supply-demand balance when Japanese manufacturers stopped production for about one month just after the Great East Japan Earthquake in 2011, the market is in a downtrend worldwide recently.

Redox Flow Battery

An article on Nikkei Technology Online dated April 15th says that, “IEC started deliberations in early April for international standardization of redox flow battery with a longer operating life that can operate on a steady basis”.

The Redox flow battery is a rechargeable battery for electric power storage and its basic principle was developed by NASA in 1974. Although it is difficult to be downsized, it has a characteristic of being safer compared to the NaS battery.

A type of redox flow battery that is made using vanadium as one of the raw materials is under development for a practical application. Development initiative has been taken by several companies including Prudent Energy in China and Sumitomo Electric Industries in Japan.

IEC aims for completing the standard in the next few years. Needless to say, it is essential to develop an efficient and safe rechargeable battery in order to expand the use of regenerated energy and a low-carbon society come true.

Redox Flow Battery

An article on Nikkei Technology Online dated April 15th says that, “IEC started deliberations in early April for international standardization of redox flow battery with a longer operating life that can operate on a steady basis”.

The Redox flow battery is a rechargeable battery for electric power storage and its basic principle was developed by NASA in 1974. Although it is difficult to be downsized, it has a characteristic of being safer compared to the NaS battery.

A type of redox flow battery that is made using vanadium as one of the raw materials is under development for a practical application. Development initiative has been taken by several companies including Prudent Energy in China and Sumitomo Electric Industries in Japan.

IEC aims for completing the standard in the next few years. Needless to say, it is essential to develop an efficient and safe rechargeable battery in order to expand the use of regenerated energy and a low-carbon society come true.

Sudden Drop in Copper Price

Currently, the copper price on the LME is the lowest in the last 8 months, trading in the USD6,700 range.

This is due to economic uncertainty in China such as the recent default on a corporate bond by a major Chinese PV panel manufacturer.

Copper markets in Shanghai and NY have also been marking a sell-off.

Sudden Drop in Copper Price

Currently, the copper price on the LME is the lowest in the last 8 months, trading in the USD6,700 range.

This is due to economic uncertainty in China such as the recent default on a corporate bond by a major Chinese PV panel manufacturer.

Copper markets in Shanghai and NY have also been marking a sell-off.


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