Indium Market Update - December 2016

Despite indium prices dropping 70 percent over the past two years, downward pressure continues to weigh on the metal.

The end of speculative buying by the Fanya Metal Exchange, in combination with more efficient ITO (indium-tin-oxide) deposition techniques and greater recycling rates, have left the indium spot market saturated with product since mid-2014.

Prices for the metal, which is mostly used in ITO coatings for flat panel displays, have seemingly stabilized over the past two months at around US$ 200 per kilogram. With the recent announcement that Nyrstar will be restarting its indium refining facility in Auby, France by early 2017, however, indium prices may be under greater pressure to settle below US$ 200 for the first time in a decade.

Until it was forced to close due to a fire in November of 2015, the Nyrstar smelter at Auby had been producing 30 to 40 metric tonnes of refined indium per year.  Repaired and expanded, the facility now has an annual capacity reported to be roughly 70 metric tonnes. This could increase global output by around 5 percent, furthering the current supply glut.

Adding to this is the 3600 metric tonnes of indium metal purportedly accumulated by the Fanya Metal Exchange, which has yet to be dealt with by Chinese authorities.

Short of the Chinese government stepping in to buy this metal for the State Reserve Bureau stockpile, any conclusion to the Fanya saga will likely result in a large quantity of indium flooding back into the market. When this may occur is anyones guess, but there may be more coming regarding this story before the end of the year.

For now, it may be wise to watch your position on indium.