Spot indium prices in Asia have risen to their highest level since October 2011, as sellers hold back expecting prices to rise further in the near term, market sources said Tuesday.
Platts assessed the spot indium price at $630-670/kg CIF Japan Tuesday, up from $550-560/kg CIF Japan assessed last Tuesday, and the highest since $680-690/kg CIF Japan on October 4, 2011.
Japanese and South Korean market participants said spot offers were difficult to obtain as Chinese and South Korean producers had stopped making offers. Traders in Hong Kong and other Asian countries, were asking for bids from potential buyers instead of making offers, they said.
The Platts assessment at $630-670/kg CIF Japan for minimum 99.99%-grade indium was on the basis of domestic sales in Japan and price indications in South Korea. The most recent spot sale was done at $570/kg CIF Japan for August delivery which was reported late last week.
In the past week one Japanese recycler reported sales to end-users at Yen 65,000 ($670)/kg or more, ex-warehouse or delivered basis.
A Japanese trader said he was aligning his buying indication with South Korean bids, which he said were at $620-630/kg CIF main port South Korea.
A South Korean trader said he would consider buying at $620-650/kg CIF.
A South Korean supplier and a Chinese producer said they were not offering spot cargoes.
The South Korean supplier source said his company's output had been fully booked by regular customers, while a Chinese producer source said he stopped exporting as domestic Chinese prices were higher.
The rising domestic price in China which limited exports to the Asian spot market and steady demand in Japan and South Korea were supporting the indium price rise, sources said Tuesday.
The Chinese producer source said he could sell at over $700/kg to local customers this month, with the most recent deal done at $720/kg for several hundred kilograms. Many of his buyers were individual investors who trade on the Fanya Metal Exchange, the producer source added.
Indium on the Fanya Metal Exchange traded at Yuan 607-608 ($98-99)/100 grams early Tuesday, according to the exchange website.
Many Chinese market participants expect the Asian indium spot price to hit $1,000/kg in the near term on the basis of Fanya prices.
"The environmental controls by the government has led to a fall in supply of crude indium. This is also supporting the Fanya indium boom," added the Chinese producer source.
He said 99%-grade crude indium, which is a raw material for producing 99.995%-grade indium, traded at Yuan 4,100/kg (inclusive of value added tax) on the Fanya exchange, compared with Yuan 3,700-3,800/kg traded in October 2011 when prices last spiked.
The exchange-driven demand has been attracting imports of indium ingot as well as scrap indium into China, sources said.
Meanwhile, Japanese indium demand has been holding stable. Japan's two largest indium consumers, Mitsui Mining & Smelting and JX Nippon Mining & Metals, are operating their 40-50 mt/month indium-tin-oxide plants at over 80% rates, up by around 10% at the beginning of the year, company sources said.
The strong sales of flat panel TVs in China have boosted ITO demand, sources said.
Meanwhile, Chinese, Japanese and South Korean market participants were concerned over rising indium stocks at the Fanya Exchange, which were heard to be at 1,400 mt currently.
"China's own indium consumption is 100-200 mt/year at most. The Fanya inventory accounts for two years of global demand. If the inventory flows into the market, prices will collapse," said one Japanese consumer.
The Fanya Exchange did not respond to queries on current stocks and the exchange stock policy.
