Last week the world copper industry gathered in London to debate the state of the market and to begin annual contract negotiations for 2019. Roskill’s Associate Analyst on Copper, Jonathan Barnes presented on Electric Vehicles – The Positive Future for Copper Demand? as just one of the many presentations that Roskill shared with registered guests at its free Breakfast in the Tower event at the Tower of London.
Roskill’s view is that “the industry remains divided on whether the refined market is in mild surplus or a minor deficit. But whatever the objective truth, it is effectively a balanced refined market in the context of a 24 Mt annual business. Price forecasting is almost impossible while the so-called US-China trade war continues, but based on our insights and the conversations we had during the week, we are convinced that all the ingredients are already in place for the next price upswing.”
Roskill also attended the TIC tantalum conference in Kigali, Rwanda, October 15-16, where Per Loof of KEMET Electronics started proceedings with a positive message from the capacitor industry. He estimates current shortages in the MLCC capacitor market to be as high as 500 billion units and believes that tantalum capacitors could fill some of this gap. Suggesting costs to set up new production to be in the region of $6 million per billion pieces, he explained the huge hurdle that the MLCC capacitor industry faces in the coming years.
The Roskill view is that “in 2017/18, capacitor consumers have begun to build stockpiles of tantalum capacitors, giving them the potential to use tantalum capacitors in some of the higher performance MLCC applications if possible. Although the price differential between MLCC and tantalum capacitors is levelling out with MLCC shortages, it is important to note that this situation is likely to reverse in the long-term as the MLCC industry catches up and brings more capacity on-line. Per Loof warned tantalum capacitor producers not to be ‘greedy’ as the attractiveness of tantalum capacitors in more mainstream applications could lessen once again if, and when, MLCC prices fall.”