Premiums for prompt delivery cerium in Europe melt away as...

Premiums for prompt delivery cerium in Europe melt away as stocks rebuild

LONDON (Metal-Pages) 31-Jan-13. Traders said they are seeing some evidence that new stocks of cerium oxide have started arriving in Europe this week, which is removing some pricing pressure on material for prompt delivery.

Two traders in Europe said there appears to be more cerium oxide available from Rotterdam now and this is removing some of the shine on prices of material for prompt delivery. Prices of $12/kg for cerium oxide, a level at which a number of transactions took place earlier this month, are now becoming harder to achieve, according to traders.

“For prompt delivery prices are now below $11/kg,” a European trader said. “There are a number of cheaper quotes in the market now. There are more in the low $9 range.” A second trader said he'd concluded a cerium oxide transaction last week at around $11/kg.

The first trader warned that prices could still spike up again as business out of China is likely to slow further ahead of the Chinese New Year starting February 10 and lasting one week. So far in January demand for cerium oxide has been running at a fairly steady pace and a lot more brisk than in the closing months of 2012.

Ongoing buying has been reported from the glass industry and it is possible that stocks could run down again ahead of the Chinese New Year. According to traders it takes around six weeks to move cerium oxide from Hong Kong to Rotterdam when including ordering, shipment and customs clearance.

However, for the cheaper material some end users have apparently been reporting problems with quality consistency. “Buying this sort of material can be risky,” the first trader said. The second trader said he also regularly sees very low offers for rare earths in the market, including for cerium, but that they nearly always come from sellers, who are not well known.

“I'm always a bit concerned about these sources,” the second trader said. “Often they have the right certificates, but the material is not always up to standard. They don't really understand rare earths.”

In other news, a European trading house has decided to pull back from the rare earths markets due to the lack of volume, falling prices and persistent uncertainty. “We may come back to it at a later date,” the trader said. This is in contrast to a number of new players who have been looking to get involved in rare earths for the first in the belief that the heavier elements are mis-priced and due for a rise in value.

-By Justin Pugsley in London ([email protected])