CBMM's Niobium Production and Market Trends

Last year, the world's largest producer sold approximately 84,000 mt of ferroniobium, Amado said in a March 18 interview with S&P Global Commodity Insights.

Including an estimated 30,000 mt of ferroniobium together with some niobium oxide made by competitors in Asia, Europe, Brazil, North America, Africa, and Russia, which are now considered to be basically out of the market, the total market is expected to be 130,000 mt this year. This compares with an estimated total market of about 110,000 mt for niobium products in 2021, according to estimates by CBMM.

Trend Away from Austenitic

A current market trend toward increased use of ferritic stainless steel relative to austenitic grades could offset this dynamic and be complementary for ferroniobium, CBMM believes.

Ferritic stainless steel usually has chromium and perhaps ferroniobium or some other alloy materials. According to Amado, prices on many of the more nickel-intensive so-called austenitic stainless steel grades are "hugely impacted" by alloy surcharges, including nickel alloy surcharges.

Nickel prices have swung wildly over the past two weeks, amid speculative market activity and price squeeze amid market concerns of a shortage of the metal stemming from Russia’s invasion of Ukraine. The London Metal Exchange cash nickel price closed at $37,115/mt on March 18, losing $5,035 on the day, after flying past $100,000/mt on March 8 before trading was suspended on the LME and Shanghai Futures Exchange.

LME nickel inventories have been trending down for roughly five months.

“There’s a switch-to-ferritic conversion happening in stainless steel already, year over year, in the product areas of automotive, white goods, construction, and energy,” Amado said. “Ferritic can provide similar properties in some applications at a lower cost: This represents an opportunity for us and can enhance supply chain performance.”

Ferritic grades may allow customers easier forward planning than, say, austenitic grades, as they are less vulnerable to the volatility of nickel's price, or supply matters, Amado said. China makes half of the world’s stainless steel, and the motivation to go to greater use of ferritic grades is already seen in the Chinese stainless market for these reasons, he said.

Stainless steel accounts for around 10% of CBMM’s overall product sales, Amado said. The company sells ferroniobium to China, Europe, the United States, and Brazil for use in the production of stainless steel.

World stainless steel melt shop production grew by 10.6% year on year to 56.3 million mt in 2021, with output from China at 30.6 million mt, the International Stainless Steel Forum said in a report dated March 14. The general demand for stainless steel is due to its corrosion resistance property.

Niobium Oxide Expansion

Brazilian niobium producer CBMM is working to expand its niobium oxide production in Brazil's Minas Gerais state to a planned annual production capacity of 45,000 mt by 2030, up from 10,000 mt now. That growth is focused primarily on making both cathode and anode materials for use in batteries in electric vehicles, in the field of which the company has set up product joint development ventures in different countries. Niobium oxide is also used in aerospace, medical, chemical, and the oil and gas sectors.

Of an anticipated investment of Real 300 million ($60 million) in its technology program this year, the company said Real 70 million will be spent on battery development.

Russia's near-complete retreat from the niobium oxide market is likely to create a gap of 500 mt this year, according to market sources, out of a total market of roughly 12,000 mt for the product, generating sales opportunities for other suppliers.