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Cabot Supermetals Business Grows 31% In June 2010 Quarter

July 30, 2010 By Dennis Leave a Comment

Profitability in the Supermetals Business (which sells capacitor grade tantalum metal powder and wire for anode applications) increased by $11 million compared to the same quarter of fiscal 2009. The improvement was driven by stronger demand from ongoing recovery in the electronics industry that resulted in higher volumes, lower costs from actions taken over the past year to reposition the business and a benefit from lower ore costs associated with LIFO accounting. Sequentially, profit improved by $11 million due primarily to higher volumes associated with the electronics market recovery, higher prices, including an improved product mix, and lower operating costs. During the third quarter of fiscal 2010, the Supermetals Business generated $18 million of cash from improved operating results and reduced working capital.

Total revenues in the Cabot Supermetal’s Business were $47 million in the June 2010 quarter, up 31% from the March quarter when sales were only $36 million USD. This means that capacitor manufacturers had increased their demand and that price increases for raw materials had begun to take hold.

Cabot Supermetals Division Revenues By Quarter

Cabot Supermetals Division Revenues By Quarter


Cabot Corporation Supermetals Business sells capacitor grade tantalum metal powder, and would be the
largest vendor of such powders in the world. We can see from the chart above that Cabot has returned to sales levels that are consistent to pre-downturn levels. Cabot is prepared for any upturn in the industry, and is well positioned to increase market share as the tantalite ore supply becomes more difficult to manage in 2011. Based upon the tightening supply chain for tantalum, and Cabot’s large reserve of tantalite, the Supermetals Business should fare reasonably well in the September quarter.

Additional Resources: (1) Tantalum Capacitors: World Markets, Technologies & Opportunities: 2010-2015 ISBN # 1-893211-11-8 (© April 2010) (2) TANTALUM: Global Market Outlook: 2008-2013 ISBN # 0-929717-81-3 (2008)

Filed Under: Financial News Tagged With: , , ,

New Tantalum Study Reaffirms Looming Metal Shortage

April 30, 2010 By Dennis Leave a Comment

A new study by Paumanok Publications, Inc. entitled “Tantalum Capacitors: World Markets, Technologies & Opportunities: 2010-2015” has reaffirmed that a shortage of the rare metal used in capacitor anodes, sputtering targets and supermetals is about to impact the global markets.

The Loss of Primary and Secondary Resources In The Tantalum Supply Chain: 2006-2009:

Between 2006 and 2009 the primary sources for tantalum ores and concentrates have undergone a remarkable change. Beginning with the closing of Talison’s (Australia) Greenbushes Mine in 2006, followed by the exhaustion of the United States Defense Logistic Agencies tantalum supply to the market in January 2007, and then followed by the closing of tantalum supply from Talison’s Wodgina Mine (Australia) in 2009; which was soon followed by the closing of the Cabot Tanco Mine (Canada) and the closing of the Noventa Marropino Mine (Mozambique). This succession of closings effectively removed about 2.2 million pounds of material from the supply chain between 2006 and 2009, with about 1.3 million pounds of hard rock resource removed from the supply chain in 2009 alone. Therefore, the study concludes that a deficit is forthcoming.

2010-2015 Forecasted Shifts in Supply For Tantalum Metal

Between 2008 and 2009 the loss of key primary sources of tantalum metal resulted in demand moving away from
Australia and NAFTA and consolidating in Central Africa. There are two sources to support this conclusion- the global import and export data and the United Nations report covering “ColTan” mining activity in the Congo. There was also an increase in tantalum coming from a by-product of tin slag mining (especially coming from VietNam and North Korea), but also a greater reliance on customer inventories, which we believe were sourced in 2008 (as customers used large volumes of captive materials to avoid high mining costs) and again in 2009 (albeit at a lower rate because inventories were lower and demand was lower). Mining activities in Brazil also appear to have remained stable in terms of volume, but materials were sold at a higher price per pound. It also appears that mining activity in China, Eastern Europe and SE Asia remained stable (but small).

Historical Growth in Worldwide Tantalum Demand: 1995-2008 CY

Between 1995 and 2008 global demand for tantalum ores and concentrates increased from 2.97 million pounds per year to 6.22 million pounds per year; which means the market has more than doubled over the 13 years between 1995 and 2008, and in fact has exhibited an average annual growth rate of about 5.7% per year.

CY 2008-CY2009 Changes in Demand For Tantalum:

For CY 2008, global consumption of tantalum ores and concentrates totaled approximately 6.22 million pounds, up by 7.2% from the 5.8 million pounds reported in 2008. For CY 2009, and in accordance with the global economic decline in that calendar year, demand for tantalum ores and concentrates declined to an estimated 4.3 million pounds- or a one-year decline of 31% in terms of consumption.

Market Forecasts for Tantalum: 2009-2015 CY

For the 2009 to 2015 time period, we now forecast that the market demand for tantalum ores and concentrates will grow at an accelerated rate of 9.2% per year over the next five years as the market rebounds from the significant downturn realized in CY 2009. We also predict increased competition for the metal between the electronics industry and the supermetals industry between 2010 and 2015. We forecast that global demand for tantalum ores and concentrates will increase to 7.33 million pounds by 2015, with a rather large one year leap in demand expected for CY 2013.

Forecasting The Tantalum Materials Market Deficit: 2010-2015

We estimate based upon the closing of the primary mining operations in Australia,Mozambique and Canada, that a deficit will build in the market in CY 2010 and CY2011 and then peak in CY 2012. This lack of ore supply will
drive up the price for tantalum ores and concentrates; which will in turn drive up the price of capacitor grade tantalum metal powder and wire; and tantalum materials sold into the sputtering target, cemented carbide and superalloys businesses in the second half of 2010.

Additional Resources: (1) Tantalum Capacitors: World Markets, Technologies & Opportunities: 2010-2015 ISBN # 1-893211-11-8 (© April 2010) (2) TANTALUM: Global Market Outlook: 2008-2013 ISBN # 0-929717-81-3 (2008)

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AVX and Cabot Announce Litigation Settlement on Tantalum

November 30, 2009 By Dennis Leave a Comment

AVX Corporation (NYSE: AVX) and Cabot Corporation (NYSE: CBT) announced the resolution of all outstanding litigation between the parties relating to the supply of tantalum by Cabot to AVX. The terms of the settlement are confidential.

According to Kurt Cummings, Vice President and Chief Financial Officer and spokesperson for AVX, “AVX is pleased with the complete resolution of these disputes which will allow both parties to focus on business challenges in the current economy. We expect that this settlement will allow both companies to forge a stronger relationship in the future.” According to Eduardo E. Cordeiro, Cabot’s Executive Vice President and Chief Financial Officer, “Cabot has always viewed AVX as an important customer and believes that the resolution of these matters is in the best interest of both parties and consistent with their long term economic interests.”

Additional Resources: (1) Tantalum Capacitors: World Markets, Technologies & Opportunities: 2010-2015 ISBN # 1-893211-11-8 (© April 2010) (2) TANTALUM: Global Market Outlook: 2008-2013 ISBN # 0-929717-81-3 (2008)

Filed Under: Raw Materials Tagged With: ,

H.C. Starck Announces Price Increases For Materials, Including Tantalum

November 30, 2008 By Dennis Leave a Comment

GOSLAR, GERMANY—The international H.C. Starck Group has announced a further price increase for substantial parts of its product portfolio. The reason is increases in costs for energy, as well as for raw and auxiliary materials, and production supplies. “These are adjustments that may even reach high double- digit percentages in some of our main product segments,” said Dr. Heumüller, CEO of the German parent company. “We are working closely with our customers to look for ways to pass on these rising costs and the inevitable price increases in the entire added-value chain.” In recent months, H.C. Starck has completed a successful performance improvement program and is positioned competitively in terms of production. “The anticipated price increases are not alone an H.C. Starck problem, but an industry problem. They are affecting all suppliers equally. Everybody will be forced to translate these unexpected cost increases into higher prices,” said Dr. Heumüller. The H.C. Starck Group is currently informing customers about the price increase. Provided that no contract periods have to be taken into account, the new prices will generally be effective as of November 1, 2008.

Readers Who Viewed This Article Also Went Here: (1) Tantalum Capacitors: World Markets, Technologies & Opportunities: 2010-2015 ISBN # 1-893211-11-8 (© April 2010) (2) TANTALUM: Global Market Outlook: 2008-2013 ISBN # 0-929717-81-3 (2008)

Filed Under: Raw Materials Tagged With: , ,