What is Niobium?
Niobium is a rare, silvery-white metallic element with a wide range of industrial and technological applications. It’s famous for its wide range of excellent properties, such as high electrical conductivity, high corrosion resistance, and the ability to withstand extreme temperatures. It’s used to produce high-strength steel, superalloys, and in the aerospace and electronics industries. Due to its unique properties, prices tend to fluctuate significantly. Read on for factors that influence the niobium price.
Supply and Demand
The balance between supply and demand is the most basic economic principle that drives the price of any commodity, and niobium is no exception. The price often increases when the need for niobium is high, but the supply is low. Conversely, if supply is high, but demand is low, niobium prices decrease.
So, what factors influence niobium supply and demand? Changes in technology, global economic conditions, and new applications are a few examples. Keep an eye on supply and demand and the factors that drive these two interconnected economic principles to stay on top of niobium prices.
Geopolitical Instability
Niobium is primarily mined in Brazil. Political instability or economic downturns in the country can significantly disrupt the niobium supply causing price fluctuations. For instance, in 2019, niobium prices rose considerably due to labor strikes that caused mining shutdowns in Brazil.
But that’s not to say Brazil is the only culprit.
Geopolitical issues in other countries can also result in fluctuating niobium costs. For example, a different country banning niobium imports directly impacts supply and demand, resulting in fluctuating niobium prices. Similarly, geopolitical factors like conflicts, international sanctions, and embargoes in other geographic regions can influence global niobium costs.
Economic Indicators
Economic indicators refer to economic statistics that can help one better understand the state of the economy. These indicators tend to influence the cost of everything, including niobium. Here are the three that directly affect niobium prices:
Inflation
Inflation is among the top factors that affect niobium costs. When inflation rises, businesses and consumers must spend more money to purchase the same goods and services. This drives up the demand for niobium and associated products, resulting in higher prices.
Fluctuating Currency, and Foreign Exchange Rates
Niobium price is often quoted in US dollars. Any changes in the value of the dollar can affect niobium prices. If the dollar strengthens, the price of niobium will increase and vice versa. Foreign exchange rates also influence niobium costs—a drop in a country’s currency potentially leads to increased prices since producers must pay more for the raw materials used during production.
Industrial Production Index
When industries have a greater production capacity, the demand for raw materials like niobium, and related products increases, leading to a higher niobium price. But when production levels decline, the demand for niobium reduces, leading to reduced prices.
Finally, the price of niobium is influenced by various factors beyond your control. Understanding these elements can assist you in making informed decisions about the metal.
Conclusion
Niobium is a valuable metal across major industries such as aerospace, automotive, and even medicine. However, it’s primarily available in three main countries. As a result, its costs are always subject to external factors like geopolitical instability, demand and supply, and economic indicators like inflation.
