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Nickel volatility spurring niobium growth: Brazilian miner CBMM

Brazilian niobium miner and processor CBMM is set to raise its sales of ferroniobium to more than 100,000 mt this year as demand from areas including stainless steel grow, especially for less nickel-intensive grades, said Rodrigo Amado, the company’s global head of growth, insights, strategy, new ventures & innovation.

The company, the world’s biggest producer, sold around 84,000 mt of ferroniobium in 2021, Amado said in a March 18 interview with S&P Global Commodity Insights.

The total market is expected to reach 130,000 mt this year, including around 30,000 mt of ferroniobium together with some niobium oxide produced by competitors in Asia, Europe, Brazil, North America, Africa and Russia, which is now seen to be effectively out of the market. This compares with a total market for niobium products of some 110,000 mt in 2021, according to CBMM’s estimates.

Trend away from austenitic

CBMM expects that a current market trend toward greater use of ferritic stainless steel, compared with austenitic grades, may favor the use of ferroniobium.

Ferritic stainless steel typically contains chromium and may use other alloy materials including ferroniobium. Prices of most of the austenitic stainless steel grades, which are more nickel-intensive, are “hugely impacted” by alloy surcharges, including nickel alloy surcharges, according to Amado.

Nickel prices have fluctuated wildly over the past two weeks amid speculative market activity following market concerns of a shortage of the metal following Russia’s invasion of Ukraine. The London Metal Exchange cash nickel price closed March 18 at $37,115/mt, down $5,035 on the previous day, after surging to more than $100,000/mt March 8 before trading was halted on the LME and Shanghai Futures Exchange.

LME nickel stocks have been on a downtrend for around five months.

“We see a conversion in stainless steel from austenitic grades to ferritic grades already happening year over year, in product areas including automotive, white goods, construction and energy,” Amado said. “Ferritic can give similar properties in some applications for a lower cost: This brings a potential opportunity for us and can improve supply chain performance.”

Using ferritic stainless steels may allow customers easier forward planning than the use of austenitic grades as their prices are not so subject to nickel’s volatility, or supply concerns, Amado said. Half the world’s stainless steel is made in China, and the move to greater use of ferritic grades is evident in the Chinese stainless market for these reasons, he said.

The stainless steel segment represents about 10% of CBMM’s total product sales, Amado said. The company sells ferroniobium to China, Europe, the US and Brazil for use in stainless steel production.

World stainless steel melt shop production rose 10.6% year on year in 2021 to 56.3 million mt, of which China produced 30.6 million mt, the International Stainless Steel Forum reported March 14. Demand for stainless steel is growing primarily because of its corrosion-resistant qualities.

Niobium oxide expansion

CBMM is expanding its niobium oxide facilities in Brazil’s Minas Gerais state to a planned production capacity of 45,000 mt/year by 2030, from 10,000 mt at present. The increase is aimed mainly at producing both cathode and anode materials for use in electric vehicle car batteries, in which area the company has established product development joint ventures in various countries. Niobium oxide is also used in the aerospace, medical, chemical, and oil and gas industries.

Of an expected Real300 million ($60 million) investment this year in its technology program, Real70 million will be spent in battery development, the company said.

Market sources estimate that Russia’s effective absence from the niobium oxide market may leave a gap of 500 mt this year, out of a total market of around 12,000 mt for this product, bringing sales opportunities for other producers.

— Diana Kinch