US Toll Free: +1-855 854 4679
Panama: +507 398 4173
As seen on:
CBS moneywatch ~ The Miami Herald
Upcoming shows:
October 9-13th, 2013 Total Wealth Symposium
  1. A Basket
  2. B Basket
  3. C Basket
  4. D Basket
  5. Silver

Monthly Archives: March 2011

US backing for world currency stuns markets

US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is “quite open” to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund.

By Ambrose Evans-Pritchard 6:05PM GMT 25 Mar 2009

The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance.

“The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation,” he said.

Mr Geithner later qualified his remarks, insisting that the dollar would remain the “world’s dominant reserve currency … for a long period of time” but the seeds of doubt have been sown.

The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours earlier that there was no threat to the reserve status of the dollar.

“I don’t believe that there is a need for a global currency. The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world,” he said.

Related Articles

* Geithner seeks power over hedge funds and derivatives

26 Mar 2009

* Tim Geithner and Barack Obama ‘at odds’ over economy

25 Mar 2009

* Positive noises cheer Wall Street

25 Mar 2009

* A world currency moves nearer after Geithner’s slip

26 Mar 2009

* Geithner about-turn on dollar shocks currency markets

25 Mar 2009

* Gold price spikes as dollar falls

25 Mar 2009

The Chinese proposal, outlined this week by central bank governor Zhou Xiaochuan, calls for a “super-sovereign reserve currency” under IMF management, turning the Fund into a sort of world central bank.

The idea is that the IMF should activate its dormant powers to issue Special Drawing Rights. These SDRs would expand their role over time, becoming a “widely-accepted means of payments”.

Mr Bloom said that any switch towards use of SDRs has direct implications for the currency markets. At the moment, 65pc of the world’s $6.8 trillion stash of foreign reserves is held in dollars. But the dollar makes up just 42pc of the basket weighting of SDRs. So any SDR purchase under current rules must favour the euro, yen and sterling.

Beijing has the backing of Russia and a clutch of emerging powers in Asia and Latin America. Economists have toyed with such schemes before but the issue has vaulted to the top of the political agenda as creditor states around the world takes fright at the extreme measures now being adopted by the Federal Reserve, especially the decision to buy US government debt directly with printed money.

Mr Bloom said the US is discovering that the sensitivities of creditors cannot be ignored. “China holds almost 30pc of the world’s entire reserves. What they say matters,” he said.

Mr Geithner’s friendly comments about the SDR plan seem intended to soothe Chinese feelings after a spat in January over alleged currency manipulation by Beijing, but he will now have to explain his own categorical assurance to Congress on Tuesday that he would not countenance any moves towards a world currency.

Chinese indium export policies pushing price over $1000/kg

Rare Industrial Metal - Indium

Indium is heading for prices of more than $1000/kg, according to industry analyst firm NanoMarkets in a new report “€˜Chinese Indium Strategies: Threats and Opportunities for Displays, Photovoltaics and Electronics”€™, which examines the impact on the electronics and related materials industries of recent Chinese policies to restrict the export of indium. Even higher prices have been suggested in the Chinese press — as much as $3000/kg.

China is the world’€™s largest supplier of indium by far, accounting for almost three-quarters of world reserves and about half of production. As such, its policies affect the markets for all indium-related electronic materials.

This activity has recently been formalized in a new Chinese five-year plan, which is designed to stimulate domestic Chinese high-tech industries. NanoMarkets claims that this move by the Chinese government will have significant negative implications for several classes of electronics products (in the areas of displays, lighting, photovoltaics, compound semiconductor chips, lead-free solders). The report therefore examines China’€™s evolving indium policy in both economic and political terms and explains how it will act as a catalyst for creating new growth opportunities in both the extraction industry and advanced electronic materials industries worldwide, looking especially at the impact on markets for novel transparent conductors and compound semiconductors.

In particular, high indium prices may force the conservative display industry to shift to ITO alternatives, especially those using nanomaterials, believes NanoMarkets.

Japanese indium users€”, who currently use 70% of China’€™s indium production,€” may find themselves without sufficient indium within a year. As a result, NanoMarkets expects firms in countries that have not been large suppliers of indium (including Australia, Canada, Laos and Peru) to rush into the market.

NanoMarkets also predicts that, for the first time, there will be significant amounts of indium extraction from sources other than zinc mines (e.g. sources such as tin and tungsten mining). The Chinese indium policy seems certain to incentivize new sources outside China to produce indium, either through primary extraction methods or through recycling/reclamation, the firm reckons.

Also, a sharp rise in the price of indium will harm the resurgent copper indium gallium (di)selenide (CIGS) photovoltaic (PV) industry, but in turn this will open the door for cadmium telluride (CdTe) and crystalline silicon (c-Si) PVs, which will become more price competitive, says NanoMarkets. In addition, new classes of absorber materials (zinc or tin) may emerge that are CIGS-like but don’€™t actually use indium.

How electronics boom is creating surge in demand for rare metals

Everything from iPods to Toyota Priuses to wind turbines are made using rare metals.
By Andy Bloxham 7:45AM GMT 11 Feb 2011

For example, the silver-grey metal tantalum is used in mobiles as a powder which helps regulate voltage, which would otherwise drop as temperatures rose. Its abilities have been vital to reducing the size of mobiles.

Hafnium is a key ingredient of Intel’s computer chips.

However, China produces around 97% of the world’s supplies, much of it coming from small mines operated by criminal gangs.

In the middle of last year, when the world market for rare earths was only £870m a year, China capped production levels and imposed a moratorium on all new mining licences until June this year.

Then, in December, it cut exports of the metals by over a third, prompting protests from Japan and the US.

With demand for iPhones and iPods soaring (Apple sold a total of 23m of the gadgets in the last three months of 2010 alone) and China keeping a tight rein on supply, the price is only likely to rise strongly.

So-called “rare earth” metals are named as such because when mining boomed in the 18th century, they were particularly hard to extract.

There are 17 of them but they are necessary building materials for navigation systems, radar, night vision goggles and, more importantly, mobile phones.

They include cerium (symbolised by Ce), lanthanum (La), neodymium (Nd), dysprosium (Dy), terbium (Tb) and europium (Eu).

Hafnium- Small Supply Big Applications

With an average crustal abundance of 3 ppm (parts per million), hafnium,€” a shiny, silver-gray metal often used in alloys and nuclear science,€” certainly isn’t rare. The metal is more abundant in the Earth’s crust than gold, silver, the PGMs, a number of the rare earths and the likes of germanium, tantalum and molybdenum. But as a metal, hafnium is only produced in quite small quantities, currently probably not much more than 70 tonnes a year.

There are two main reasons for this. First, hafnium is only ever produced as a byproduct of refining zirconium for use in nuclear-related applications, especially in nuclear power plants. Second, it is extremely difficult to separate the metal from zirconium, the element with which it is most often found.

 Indeed, because of this, only two significant producers of the metal exist worldwide at present: ATI Wah Chang [part of Allegheny Technologies Inc. (ATI) in Oregon in the U.S.; and CEZUS in Jarrie, France, part of France's AREVA group (ARVCF.PK) and the world's largest builder of nuclear power stations].

A Bit of History

Given the difficulties in recovering the metal, it may come as no surprise that hafnium was one of the last elements to be discovered. Although scientists had already reserved a place for it on the periodic table, element 72 (hafnium) had yet to be identified as recently as 1920.

In 1923, hafnium was identified (using X-ray analysis) as being distinct from zirconium, and recognized as an element in its own right by the Dutch physicist Dirk Coster and Nobel Prize-winning Hungarian chemist Gyrgy Hevesy, working in Copenhagen, Denmark. The name hafnium comes from Hafnia, the Latin name for Copenhagen.

Whence Hafnium?

In its metallic state, hafnium is a shiny, ductile metal about twice as dense as zirconium. However, hafnium is never found as a pure metal, and it must undergo a long and complex refining process to end up as such.

In nature, hafnium occurs with zirconium at a ratio of around 1:50, appearing in a number of zirconium-bearing ores and minerals, such as zircon and baddeleyite. (There are at least two other hafnium-bearing ores — alvite and hafnon, but they are not common.)

The primary source of hafnium is the zircon that results from the processing of zirconium-bearing ilmenite, or heavy mineral sands. This is further separated into rutile (consisting mainly of titanium dioxide, TiO2) and zircon (ZrSiO4) sand. (Not all ilmenites, however, contain zirconium and, thus, hafnium.)

The world’s major producers of zircon sand are Australia, South Africa and China, while Brazil, Ukraine and Russia all possess and produce commercially viable resources of baddeleyite.

 The production of hafnium metal is predicated upon the production of zirconium metal sponge from zircon sand, generally for the nuclear industry. For zirconium to be effective in nuclear fuel rods, it needs to be as transparent and impermeable to neutrons as possible. This, in turn, requires that the rods contain as little hafnium as possible, since hafnium’s thermal neutron absorption cross section is some 600 times that of zirconium.

While their neutron absorption properties of hafnium and zirconium are almost exactly opposite, in nearly all other aspects except density, the two metals’ chemistries are nearly identical. This is why they are so difficult to separate.

In the past, hafnium metal was produced via a process developed by van Arkel and de Boer, in which the vapor of the tetraiodide was passed over a heated tungsten filament. These days, nearly all hafnium metal is made via the Kroll process, by reducing the tetrachloride either with magnesium or with sodium. The metal can then be purified further either using the van Arkel/de Boer iodine process or electron beam melting. The first method is currently used by ATI Wah Chang to produce its ultralow zirconium hafnium crystal bar.

Uses Of Hafnium

Currently, hafnium has three important uses: superalloys (in both aerospace and nonaerospace), refractory metal alloys and nuclear applications.

Alloys

In high-temperature alloys and polycrystalline nickel-based superalloys, hafnium’s high melting point, 2,233°C (4,051°F) — helps strengthen grain boundaries, thus considerably improving both high-temperature creep and tensile strength. In addition, with its high affinity for carbon, nitrogen and oxygen, the metal also provides strengthening through second-phase particle dispersion.

One of the most common uses of hafnium is as one of the alloys in the superalloys used in the turbine blades and vanes found in the “hot end” of jet engines, i.e., in environments with very high temperatures and pressure and high stress. Such superalloys can contain 1-2 percent hafnium. For example, MAR-M 247,€” a polycrystalline nickel-based alloy developed by Martin-Marietta Corp. and used by Siemens in land-based turbines that operated at temperatures up to 1,038C,€” contains 1.5 percent hafnium.

Hafnium can also to be found in a number of other alloys, such as tantalum-based T111 (Ta-8%W-2%Hf); tantalum/tungsten-based T222 (Ta-10%W-2.5%Hf-0.01%C) and molybdenum-based MHC, or molybdenum-hafnium-carbide, which breaks into 1.2%Hf-0.1%C (the rest moly). In addition, it can be found in a number of niobium-based alloys: C-103 (10% Hf-1%Ti-1%Zr); C-129Y (10%W-10%Hf-0.7%Y) and WC-3015 (30%Hf-15%W-1.5%Zr).

Among other applications, niobium-based alloys containing hafnium have been used as coatings for cutting tools, while C-103 and hafnium-tantalum-carbide have been used in the fabrication of rocket engine thruster nozzles.

In both alloys containing tantalum and molybdenum, as well as in binary compounds, hafnium is also an excellent refractory material. With a melting point of over 3,890°C, hafnium carbide (HfC) makes one of the most refractory binary materials around. And with a melting point of some 3,310°C, hafnium nitride is the most refractory of all known metal nitrides.

And there could be a number of as-yet-undiscovered uses for hafnium both in alloys and in catalysts. Several years ago, an article appeared in Chemical & Engineering News: “Happening Hafnium: Once obscure transition metal is now garnering attention as a potential superstar catalyst.”

Nuclear

We have hafnium metal only as a result of the decision to use zirconium in nuclear applications. As mentioned previously, purified zirconium must contain as little hafnium as possible to be of any use in uranium-based fuel rods, so the hafnium must be entirely removed. Thus, it’s perhaps appropriate that, apart from its use in alloys, one of hafnium’s other major applications is in nuclear contexts.

While the chemistry of hafnium and zirconium may be quite similar, their properties in a nuclear environment could not be more dissimilar. Zirconium is virtually transparent to neutrons, while hafnium is extremely absorbent. Thus, while the fuel rods themselves are often made out of zirconium, control rods (which mop up the neutrons flying around and, therefore, slow nuclear fission in the reactor) are often made of hafnium. One of their first uses in this context was in the pressurized light water reactors used to power such naval vessels as submarines.

It is, though, interesting to note that the effects of contamination of one metal by the other appear not to be symmetric; hafnium control rods can still function effectively if they contain up to 4.5 percent zirconium, but certainly not vice versa for fuel rods. In addition to its neutron absorbency, hafnium also boasts two further valuable properties in the nuclear context: strength and resistance to corrosion.

Other applications of hafnium are quite varied:

Plasma welding and arc cutting: Because of its ability to shed electrons into air and hence establish an electric arc, hafnium is used as an insert in plasma torch welding tips instead of tungsten, and as a cathode in plasma arc cutting.

Microprocessors: Chip-makers use hafnium chloride (HfCl4) and hafnium oxide (HfO2) in microprocessors, not least of which because its temperature resistance makes it a good replacement for silicon. For example, Intel’s 45nm high-k chip is hafnium-based, following the company’s discovery that “introducing hafnium into silicon chips helps reduce electrical leakage enabling smaller, more energy-efficient and performance-packed processors.” Other electronics companies are now looking at the possibility of using hafnium oxide to make ReRAM.

CVD/PVD coating: Hafnium is often used as a thin film coating to provide hardness and protection (for example, in optical applications), via either chemical vapor deposition (CVD) or physical vapor deposition (PVD).

Lasers: Hafnium oxide is also used in blue lasers in DVD readers.

Demand For Hafnium

Figures for both demand and supply of hafnium are extremely difficult to find, not least because of both the exiguous number of producers and the relatively small number of consumers. It is, therefore, possible only really to give either “typical” figures or best “estimates.”

On the demand side, typical annual demand for the metal remains around 77 tonnes.

While the demand for hafnium from the electronics industry (for chips) appears to be increasing slightly, there is strong demand growth for the metal both in air plasma applications and superalloys. (In the aerospace industry, in general, engine manufacturers are always seeking materials that will enable their engines to run at higher temperatures and, hence, consume fuel more efficiently.)

It is, however, from the nuclear industry that the greatest growth in demand may arise. According to the World Nuclear Association, quoting figures from the Nuclear Engineering International Handbook 2010, there are currently some 439 nuclear power plants in commercial operation alone, with 60 under construction in 15 different countries. More than 155 further power reactors are planned worldwide, with over 320 more proposed. What’s more, in order to increase capacity, many reactors already in operation are either in the process of or will soon be upgraded. And this does not take into account the routine maintenance/replacement work that is always being undertaken.

That said, however, control rods in, say, pressurized water reactors are not exclusively made using hafnium. Because of both its limited availability and relatively high price, a number of other materials can be and are substituted; for example, boron or silver-indium-cadmium alloys, which usually contain 80 percent Ag, 15 percent In, and 5 percent Cd.

Supply Of Hafnium

Estimates are that the two main hafnium producers, ATI Wah Chang and CEZUS, produce around 40 tonnes and 30 tonnes of the metal annually, respectively (of which, 20 tonnes and 10 tonnes, respectively, is hafnium crystal bar, which has both ultralow gas and zirconium contents). It may be less, however.

India produces the metal but does not export it. China, too, produces hafnium, but not of any useful purity: maybe around two tonnes a year. While both the technology and plants currently exist to remove hafnium from zirconium, they do not yet exist to refine hafnium to any significant level of purity; for example, 0.2-0.5 percent (or ultra/extra low) zirconium content.

In the past, both Russia and Ukraine produced hafnium under the Soviet system. In Russia, JSC “Chepetsky Mechanical Plant,” Glasov still lists hafnium as one of its products. And in Ukraine, the Volnogorsk State Mining-Metallurgical Integrated Works in the Dnepropetrovsk region indicates that it, too, produces hafnium. Estimates are that only some 2 tonnes of hafnium currently come out of Russia and/or Ukraine currently; most of what originates from Ukraine most probably comes from stockpiled past production rather than any current production.

Looking ahead, Russia certainly has the potential to produce anywhere between 3 and 10 tonnes of hafnium a year, and Ukraine perhaps even 5 tonnes. And, with its nuclear energy ambitions, China will certainly be looking at producing high-purity hafnium sooner rather than later. Whether it will export any excess (should there be any), however, remains imponderable.

 What is being produced “under the radar,” however, is anybody’s guess.

Hafnium Prices

The price of hafnium is interesting on two counts. First, historically, the price of the metal has remained very steady over quite long periods — from 1970 to 2000 there was extraordinarily little volatility in it price. Second, it appears to be so cheap. Currently, hafnium with 0.2-0.5 percent zirconium content sells for around $1,200-1,300 per kilogram. On occasion, hafnium with an even lower zirconium content (<0.1 percent) is produced and sold at an even higher premium. The metal with 0.5-1.0 percent zirconium content sells for $800-900 per kilo, while that with 1-3 percent zirconium content sells for $500-700 per kilo.

However, with only around 70 tonnes of the metal being produced each year, compared to, say, only about 50 tonnes of rhenium produced each year, one wonders: Why does hafnium fetch so much less than rhenium, which currently sells for $4,000-5,000 per kilo?

Opportunities In Hafnium

Unfortunately, because of both its strategic nature in the nuclear arena and the difficulties involved in its production, there are no pure plays in hafnium. Hafnium is either produced by state-owned concerns or as just one line of business for the two big groups producing the metal commercially: ATI Wah Chang and CEZUS.

Of course, “pure play” in this context will never be possible insofar as hafnium production having always been associated with zirconium production. However, this is not to say that, looking ahead, there may not be companies in either China or Russia that offer pure plays in both. Whether or not they are permitted to be publicly owned, though, is a different matter.

And for any of you who may be wondering if you can go out, buy a bar of hafnium crystal and store it in your cellar as an investment, the answer is pretty much an assured: “No!”

While the metal itself is, in most (but not all) forms, not hazardous, under the “Nuclear Non-Proliferation Treaty,” hafnium is considered a “dual use” metal. So, any chances of your buying it, as an investor, without the correct import/export licenses and end-user statements and squirreling it away are probably zippo.

But don’t think people haven’t tried smuggling it: Ukrainian Customs Confiscate Nuclear Material from Two Germans and Bulgaria Prevents Smuggling of Nuclear Metal. In this last instance, four men tried to get 3.4 kg of the metal across the border from Bulgaria to Romania undetected. Of course, the question remains as to why they were stopped in the first place …

Afterword

For those who might enjoy reading about some of the more “interesting” possible uses of hafnium, discussions around its use as an energy source or weapon of mass destruction are sure to amuse – if only for some of the surprising claims that have, in the past, been made of the metal.

March 1, 2011
By Tom Vulcan

Bernanke: Inflation risk ‘modest’

Annalyn Censky, staff reporter March 1, 2011: 11:29 AM ET

NEW YORK (CNNMoney) — In his twice yearly testimony to Congress Tuesday, Federal Reserve Chairman Ben Bernanke acknowledged surging oil and food prices, but said that inflation would likely remain tame.

“My sense is that the increases we’ve seen so far — while tough for many people — do not yet pose a significant risk to the overall recovery,” Bernanke said.

Speaking before the Senate Banking Committee, Bernanke noted that rising commodity prices will likely be passed on to consumers, but this effect would be only “temporary and relatively modest.”

But he acknowledged that if higher prices persist, inflation could become a serious risk. “Sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability,” he said.

The Fed projects inflation of less than 2% for each of the next three years.

Since the recovery began, the Federal Reserve has struggled to communicate its efforts to balance a somewhat schizophrenic economy.

Company earnings are improving and stocks have nearly doubled over the last two years. But businesses still aren’t hiring, the housing market has show few signs of life, and surging energy and food prices are hitting both businesses and consumers.

In his prepared testimony, Bernanke defended the Fed’s latest controversial methods of stimulating the economy.

In November, the Fed embarked on its second round of so-called quantitative easing, dubbed QE2, which is meant to boost business activity and consumer spending by keeping interest rates low and injecting $75 billion into the U.S. economy each month.

But he has recently come under fire for the policy, as critics argue it could boost long term inflation. Now that energy and food prices are rallying, the pressure on Bernanke has intensified.

On Tuesday, he repeated his claims that a wide range of upbeat market indicators show that the Fed’s recent actions have been effective.

“We have all the tools we need” for “a smooth and effective exit at the appropriate time,” said Bernanke, adding that the central bank is also ready and able to tighten monetary policy when needed.

When it comes to employment, the Fed chairman noted that the one million jobs established since the recovery began were barely enough to accommodate the inflow of recent graduates and other entrants to the labor force.

“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” he said.

Bernanke also repeated calls for Congress to raise the debt ceiling. The government is currently restricted to a $14.294 trillion cap on how much it can borrow, and Treasury Secretary Tim Geithner has warned that level could be breached as soon as April 5.

“Not increasing the debt limit is like saying you’re going to solve your family’s debt problems by not paying your credit card bills,” Bernanke said.

The Fed chairman traditionally speaks before Congress twice a year, defending the central bank’s latest policies, in a formal testimony formerly known as the Humphrey-Hawkins reports.

– CNN Senior Producer Scott Spoerry contributed to this report.