Zirconium has what appears the most benign of origins as a raw material. It is generally found as Zircon, an oxide of Zirconium, combined with silicates in sand deposits. When you consider it’s unique properties and applications it is fortunate that deposits are relatively widespread and predominantly from stable reliable sources. Australia leads with South Africa, China, Brazil, India and many other countries following along behind. So raw material supplies are far from short supply. The production process, although a little involved and requiring significant amounts of electricity to produce, the refined pure metal is technologically straight forward. Production of refined metal and semi finished strips, tubes, bars, etc are largely in the hands of well established niche specialty metals producers like Cevus-Areva of France and Allegheny Teledyne’s Wah Chang. So this is not a product in which the world need fear being held to ransom by some third world dictator or as is sometimes portrayed in xenophobic reports Chinese producers bent on global domination. It is just as well because 90% of metallic zirconium is used in nuclear reactors to make the hollow fuel rods that contain uranium pellets. The intense heat, pressure and high radiation environment in a nuclear pile requires some rather special properties and although trials have been made with ceramics, so far zirconium is the only metal that has proved reliable over the six year life of a typical fuel cell.
As one would expect with the application this is not a metal much handled by traders and there is no exchange so pricing is often difficult to track but according to dealer Lipmann Walton quoted in Reuters pricing is currently between $60 and $80/kg. That puts the global market for nuclear grade metal at about $350-400 million, before conversion into semi finished forms.
According to the World Nuclear Association, there are currently 436 nuclear power stations around the world operating in over 30 countries providing 15% of the world’s electricity. The reliable supply of fuel cell materials is vital if the lights are to be kept on around the world. The nuclear industry, at least outside of the US, is under something of a renaissance with more than 40 new reactors under construction in 12 countries and a further 110 planned and 272 proposed. Even the US could see some existing idled facilities restarted but a genuine resurgence in US reactor construction awaits resolution of the 20+ year debate on disposal of nuclear waste. Nevertheless, US firms could still benefit from the increasing demand for nuclear power in other parts of the world. If even a significant part of the WNA planned plant development is implemented some see a crunch time in zirconium supply with producers not able to meet both new construction and existing replenishment demand. A new boiling water reactor consumes 44 tons of zirconium metal, a pressurized water reactor (as favored by US firms) 29.5 tons and Russian light water cooled reactors 31.8 tons. Westinghouse just announced the sale of three new generation PW reactors to China this month won against competition from France and Russia. World production of zirconium is only about 5,000 tons per annum, so by our calculation there should be sufficient supply to meet demand. 436 reactors each require replacement every six years plus 110 new reactors coming into service over the next 3-5 years should be achievable within a production ceiling of 5000 tons. However we doubt the math is that simple. Clearly if 5000 tons is being produced and consumed today the arrival of a further surge in demand may indeed cause delays and cost increases. At least the raw material supply base is not constrained so those of you lucky enough to be playing golf with the new Liquidmetal (Zirconium alloy) clubs will still be able to enjoy the advantages they purport to provide!