The price of hafnium has risen over the past two years or so, with only a few interruptions - at times significantly. However, following a record high in October, there are now signs of a price correction. However, demand for the raw material remains unabated.*
Is the price trend for hafnium about to reverse? After the price level of the strategic metal remained relatively stable for years, the price has risen unusually sharply since the beginning of 2022. In October 2023, it reached its highest point to date, which was characterised by a Increased demand in the aviation industry, among others The price of the raw material has been rising for years, while supply is very limited and production is concentrated in just a few countries. The upward trend now appears to have come to an end, with prices currently falling slightly but remaining at a very high level. What is the background to this development?
More suppliers revitalise the market
Meier cites the increased number of suppliers of the raw material in certain forms of processing, which could have led to an oversupply of individual materials, as possible reasons for the recent fall in the price of hafnium. As a result, this has depressed prices. At the same time, the aircraft industry, an important buyer of the strategic metal, has made preparations and has already covered its raw material requirements for the coming year with contracts. On the other hand, according to Meier, demand for semiconductors, including for computer chips, is continuing to increase. As a result, the demand for hafnium is now over 100 tonnes, compared to 60 to 70 tonnes in previous years.
Price development of hafnium
Where could impetus for the hafnium market come from in 2024?
Even though prices are currently falling from a historic high, demand for the technology metal, which is classified as a critical raw material by both the European Union and the USA, remains high.
With the aviation industry, the nuclear sector and the semiconductor industry, three sectors could have a significant impact on international demand in the coming year:
Since the beginning of 2022, the aviation industry has been recovering from the consequences of the coronavirus pandemic and aircraft manufacturers' order books are full. There has been little change in this respect in the current year and the forecast for 2024 Consulting firm Deloitte expect a similar development. On the one hand, this applies to civil aviation, which should benefit from the catch-up effect after the lockdowns in 2021. The International Air Transport Association IATA expects passenger traffic turnover to rise in the coming year: it could increase by twelve per cent compared to 2023 to USD 717 billion. On the other hand, according to Deloitte, the military sector will also grow, driven by increasing geopolitical uncertainties. The procurement of raw materials, especially critical minerals, poses a particular challenge for the industry, the report continues, referring to the highly locally concentrated production of many resources.
Nuclear energy, where hafnium is used as a material for control rods in reactors, is also likely to provide impetus in 2024 and beyond. At the World Climate Summit in Dubai in December, more than 20 countries signed a declarationwhich aims to triple the use of nuclear power by 2050. The signatory states include the United States, Japan, France and the United Kingdom.
Last but not least, the semiconductor industry could also ensure an increase in demand. Hafnium tetrachloride is used as a Coating for the next generation of very small computer chips.
In response to growing demand for hafnium, the French company Framatome discontinued. At the beginning of December, it announced investments in the expansion of capacities for the production of high-quality hafnium and zirconium alloys. France is the most important country of origin for hafnium, accounting for 49 per cent of global production.
The extent to which these developments will affect hafnium prices in 2024 in detail will gradually become apparent over the coming weeks and months.
The industry specialist TRADIUM will continue to keep all those interested in the topic up to date with its price charts and provide regular information on new developments on the commodities market.
* In this article, we refer to the development of the price of hafnium in US dollars, the leading international currency on the commodities markets.
