Ever wonder what the Nb stands for when glancing through stainless and alloy analysis certificates? Yes well ok we at MetalMiner do have some strange pastimes, I grant you. Niobium is one of those minor metals that one rarely hears much about but which because of its unique properties is a crucial element in all kinds of specialist applications, from jet engines to prosthetic implants to cutting tools and more. According to the USGS, nearly all of the world’s supply comes from one major producer in Brazil, CBMM, who not only mine the ore pyrochlore but also concentrates it to 55-60% Nb oxide and then further refines the oxide to ferro niobium in various purity grades. It is not that niobium only exists in Brazil, other countries do produce small quantities, the number three producer is in Canada, but Brazil’s reserves alone are likely to keep the world supplied for the next 500 years at current consumption rates.
The metals unique properties really become apparent when alloyed with steel and other metals like nickel. Under such circumstances niobium imparts high corrosion resistance, strength, and yet remains readily machineable. 90% of all niobium used is as the ferro alloy, split roughly 78% in low alloy steels for oil pipelines, car and truck bodies, tool steels, railroad tracks and shipbuilding grade plate. The balance 22% is mostly consumed in the manufacture of inconel and similar super alloys for use in jet engines and other high temperature applications.
With no traded exchange and supply held in the hands of relatively few suppliers the market prices has been remarkably constant over the years. In real terms it has been coming down as, if nothing else, inflation has added to the costs of manufacture. Minor competition from new entrants is probably the reason producers have not taken or been able to take advantage of rises in demand as seen from the middle of this decade. Ferro niobium prices this year have been drifting off among traders from $ 39-41/kg Nb at the beginning of the year to $ 37-39/kg Nb in warehouse in Rotterdam during February according to www.ferroalloynet.com. The Chinese market is also reported to be weak with mills unwilling to commit to new orders as demand softens.
As one can judge from the above applications, demand does not move with the broader steel market but rather follows the fortunes of the specialist applications the metal is used in. Autos, cutting tools, oil pipelines and construction, all principal users of niobium alloys are down. Jet engines and turbines are for the time being still doing okay although cracks are beginning to show. Only rail holds out much hope for rising demand if the stimulus package really does equate to increased investment in high speed rail investment. With supply held in the hands of relatively few producers prices have not and are not likely to experience the extreme volatility that the wider commodity complex has seen. Brazilian producers in particular could prevent prices dropping further by simply withholding supply, but a sustained price increase is unlikely before demand in key industry segments returns.