The new Roskill report on the tantalum industry will be published in May 2005. It will provide up-to-date market analysis of resources, production, consumption, end-use market trends, international trade and prices.
Over the past few decades, the tantalum market has been characterised by long periods of stability, punctuated by sharp price rises created by strong global demand and fears, usually unfounded of impending raw material shortages. Stability was reinforced when Cabot and Stark, the worlds largest tantalum processors, entered into long-term, fixed price supply contracts with Australias Sons of Gwalia, the leading mine producer. Those arrangements helped keep prices in the open market fairly constant, even when global demand for tantalum entered into a period of strong growth during the second half of the 1990s, in response to rapid expansion of the demand for consumer electronics, and mobile telephones in particular.
Booming sales of mobile telephones between 1998 and 2000 resulted in supplies of electronics components, including tantalum capacitors, becoming tight and prices increased. Demand for tantalum raw materials also increased, rising to levels that could not be met by the traditional suppliers. Spot tantalum prices rose to US$40-50/lb by mid-2000 and by December had reached US$240/lb.
In early 2001, a number of capacitor manufacturers, made nervous by spiralling tantalum prices and the threat of raw material shortages entered into long-term, fixed-price contracts with processors. However, instead of continuing to grow, the mobile telephone market turned downward in 2001, as did other end-use markets, such as the aerospace industry. Tantalum prices started to fall sharply. By the end of the year prices were back to pre-boom levels, and in early 2005, spot prices remain at below US$40/lb. Capacitor manufacturers were particularly hard-hit by the downturn, and were left with large over-valued tantalum inventories and an obligation to keep purchasing material at prices much higher than those available in the open market.
In 2005, the principal end-use markets for tantalum ? mobile telephones and other electronic equipment, aerospace and automobile manufacturing ? have returned to a long-term growth trend. That will not, however, fully translate into additional demand for tantalum. In the capacitor segment, smaller case sizes are reducing unit consumption of component materials, and tantalum is also losing market share to other materials, such as ceramics, aluminium and niobium, in applications where it previously had little competition. Increasing rates of recycling will also result in secondary materials accounting for a larger part of total supply.
There are numerous deposits of tantalum that could be brought into production given the right market conditions, with some large projects already in advanced stages of development. The commercialisation of new deposits could be the key to securing the future of much of the tantalum industry. Consumers have become cautious of tantalum because of uncertainty over raw materials availability and pricing. The supply base is currently rather narrow, with only a few large producers. It would only take a disruption in output from one major mine to throw the market into disarray once more and lead to redoubled efforts among capacitor manufacturers to eliminate tantalum from their products. The Economics of Tantalum, 9th edition 2005, contains detailed information about each of the potential tantalum producers.
Table of contents:
- Summary
- Introduction
- Tantalum supply and demand
- Production and processing of tantalum by country
- Consumption of tantalum
- End-uses of tantalum
- Tantalum prices
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