Tantalum Ores & Concentrates-Global Market Forecasts: 2008-2013

Tantalum Ores & Concentrates-Global Market Forecasts: 2008-2013

Summary and Conclusions:

Demand for tantalum in 2008 is growing for applications in superhard metals, while slowing down in the use in tantalum capacitors. The fundamental problem explored in this study is that the supply chain for tantalum capacitors is consuming only about 60% of their demand from the merchant market at this time. The remainder is being sourced from inventories from the supply chain upset in the 2000 and 2001 time period involving take or pay contracts, which moved the value up the supply chain.

The difference in 2008 is that tantalum consumption in superalloys still remains strong. Tantalum content in a nickel based superalloy is about 10% by weight for advanced alloys. This market is feeding into the aircraft manufacturing segment, oilwell services (downhole pump and sensors), and power generation equipment segments which are growing nicely in 2008 and again in 2009. An additional market that requires a more advanced type of tantalum for medical implants is also growing sharply in 2008. This is also a subset of the superhard metals segment of the market.

The profits in the superhard materials business over the past three years can handle a price increase for tantalum ores and engineered powders, while the capacitor manufacturers have struggled to break even as the fight against advanced high capacitance ceramics, which have encroached upon tantalum at every available opportunity.

In hardmetals, the important segment that has slowed down substantially is the segment that feeds into cemented carbide based cutting tools. Globally, this segment has too much exposure to automotive which heading into 3Q 2008 looks to be exceedingly weak, regardless of growth in demand in China and India.

So the ultimate outlook suggests that demand will continue to rise for tantalum at a more rapid rate as the capacitor manufacturer’s burn down inventories and demand from hardmetals continues to grow. Hardmetals will gain more importance in 2008 and support higher prices because they need the metal and their margins can afford price increases.

Tantalum sputtering is also viewed separately here, but also as a growth market. Demand for sputtering targets made from tantalum is also increasing. The sputtering technology can be applied to placing a hard coating on wear parts to make them last longer. Sputtering and chemical processes also produce optical coatings of tantalum. Tantalum is also used as a sputtering target to create resistance in advanced integrated passive devices and substrates.

Tantalum Ores & Concentrates-Global Market Forecasts: 2008-2013
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