Read below great Question and multipe responses on Niobium
Niobium outlook as per IAG
Excerpt from IAG's transcript below. Very encouraging outlook and good comparison with vanadium. IAG will make $100m in operating CF from Niobec this year... think they should spin Niobec into a separate entity, the stock price is affected by the drama surrounding POG too much.
Brett Levy - Jefferies
Hi, guys. Can you talk about the outlook? We like niobium pricing and everything else, but can you talk about supply threats and demand growth? And just talk a little bit about what you see the macros being in niobium going forward?
Carol Banducci - Chief Financial Officer, Executive Vice President It's Carol here. We continue to be very positive in terms of the outlook for Niobium. We saw the steel market improve by about 3.5% this year. We are seeing strong demand coming out of China and Asia but we sell all of our production. And the biggest challenge that we have right now is not being able to provide our customers with all the demand that they have. So we are able to sell all of our production. And as you saw, we have revised based on some of the trade permits that have been at the mill to be able to increase our production, our throughput and recovery which is increasing our sales for longer term and we are expecting the steel market to continue to improve and we expect to use of niobium to continue to rise. And the reason being is that, you are producing a high strength alloy steel and it allows the end user to consume less steel more cost effectively because you use less steel on the construction. So again we are seeing strong demand coming out of the automotive sector as they are being regulated to produce a lighter vehicle. We are seeing in the construction of pipeline, to again bring more integrity to pipelines making them stronger and obviously less likely to leak. And we are seeing it in construction and so we are seeing it with bridges and buildings. So we are very positive in terms of the outlook, and we see both growth on the steel side in terms of consumption but we are also expecting to see the amount of niobium used on a per ton basis to increase and we are already beginning to see trends in that area. So again it's a very attractive market and we expect it to continue to grow.
Steve Letwin - President, Chief Executive Officer, Director I guess the good thing, Brett, its Steve here, is we don't get a lot of pushback from the steel companies on the pricing because you have to use so little of it to have an impact. And the best example is in the manufacture of a vehicle today, $9 worth of niobium reduces the weight of a car by 100 kilogram. So it costs very little to do some very, very positive thing. The major, if you want to call it a threat, but it also can be a very positive is the producers themselves. And as you know, we have three of them, CBMM, us and Anglo American. And CBMM has been very, very good in making sure that prices stay strong. So that plus everything that Carol said, we have got a very positive outlook for the pricing.
Brett Levy - Jefferies Yes. It seems like there's a very fairly oligopolistic tendency within niobium. How about outlook from substitute products like vanadium or can you talk to a little bit of the dynamic between the two alloying elements and whether there's a supply threat there?
Carol Banducci - Chief Financial Officer, Executive Vice President Maybe I will just start and let me pass it over to Gord. Again, it's not one-for-one. You require two units of vanadium for one unit of niobium. And there are a lot of applications where you cannot apply the same, you can't apply vanadium to the production of the high strength alloy steel that our consumer or customers are looking for. So in many cases, it's not a straight substitute. You cannot substitute it and again the price dynamics is two-to-one. And there is a lot of stability around niobium. Prices are small which our customers like and again the steel has to get qualified for use. So there is a real barrier when any producer has to change the formula. Gord?
Gord Stothart - Chief Operating Officer, Executive Vice President Yes. That's exactly right. It is not a straight substitution and you do get some variability in the exact characteristics. The other piece of about the vanadium market, we are cheering quite loudly for further development of the vanadium battery technology in the future, which could drastically change the dynamics around vanadium itself. So at the end of the day, it makes niobium that much more attractive
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