Tantalum Market Was Not Traded Openly

In terms of tantalum’s tradability, Smith noted that, as it was not traded openly,  tantalum  market has always been subject to large swings in over- and undersupply. Tantalum prices had recently demonstrated volatility, increasing by over 300% to around $550/kg in 2011.

Most tantalum was sold under long-term contracts rather than through the spot market, which had traditionally resulted in pre-emptive buying. As a result, prices did not always immediately reflect the supply/demand deficit.

“As a result, gauging a long-term stable price is challenging, but if we assume a conservative steady growth rate of consumer electronics in the coming years of around 4%, then the market will be perfectly balanced.

Growth above 4% will result in a supply shortage by next year and we, therefore, assert that prices have now bottomed out and should start reflecting our expectation of a market deficit,” said Smith.
 

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