Although demand for steel is still falling fast, the minor metals used for steel production might soon sway the industrial metal market. Recent demand for ferro chrome and molybdenum, for example, has increased in India and China, and global stimulus packages could soon affect demand even more. Meanwhile, production cuts in the industrial metals sector during the past few months can also advance demand for certain minor metals, since ferro chrome and molybdenum provide few alternatives for steel production.
As the MetalMiner IndX has recently shown, base metals have still seen better days, and major base metal output cuts can still negatively affect minor metals. Since some minor metals are “by-products” from base metals, as expert Jack Lifton explained in a recent interview on Resource Investor, those metals can hurt the survival of important minor metals:
For example, the base metal zinc is our only source in the world of germanium, cadmium and indium metals. The base metal copper is a source of 75% of the world’s molybdenum and rhenium. Copper is also the source of 95% of the world’s tellurium and selenium; and the base metal aluminum is the only source of the metal gallium.
And when they reduce the production of base metals, they also reduce the production of molybdenum, rhenium, selenium, and tellurium. So what? Well, you can’t make a jet engine or a rocket engine without rhenium. First Solar Corporation in Ohio makes cadmium telluride thin film photovoltaic cells [which we have previously discussed on MetalMiner]; the cadmium comes from zinc, and the tellurium comes from copper. Therefore, the reduction in base metals production has also reduced the production of the key minor technology metals used for solar-and there is no substitute. So right this minute we’re in the situation of running on inventory, which is not large, and recycling is almost non-existent for these materials because their uses are dissipated.
Despite some hopes for an uplifting future, the large physical inventories of exchange metals such as aluminum and copper could soon lead to a new downturn when inventory numbers hit record highs. Although analysts keep pushing minor metal investments, especially with expectations for more alternative energy under Obama, others advise not to push the minor metal surge too far — because the good news for minor metals, even those used in steel production, might not last.