International prices for strontium carbonate, a key industrial raw material, have been rising sharply against the backdrop of escalating tensions in the Middle East, particularly surrounding Iran. Spot prices have reached $1,300 to $1,500 per tonne, a surge of approximately 15 percent over a very short period from the end of February.
Behind this price spike lies a structural problem in the raw material procurement network of China, the world's largest refiner of strontium carbonate.
Iran Tensions Drive Celestite Price Rise and Pass-Through to Finished Goods
The surge in strontium carbonate prices is a direct result of supply concerns and rising prices for celestite (also known as celestine), the strontium-bearing ore that serves as its primary raw material.
China, the world's largest producer of strontium carbonate, depends on imports for the majority of its celestite ore supply, with Iran and Mexico being its two largest source countries. The rapid escalation of geopolitical risks around Iran has set off the following chain of events.
First, supply disruptions and price increases for Iranian ore. Concerns over mine operations and disruptions to maritime logistics out of the Persian Gulf region, combined with sharply higher shipping insurance premiums, have driven up the import price of Iranian celestite bound for China. Second, Mexican ore prices have surged on substitution demand. Chinese refiners seeking to reduce their exposure to Iranian supply have concentrated their purchasing on Mexico, the other major import source, which has in turn pushed up the price of Mexican ore as well. Third, these higher raw material import costs have forced Chinese strontium carbonate producers to implement significant product price increases to protect their margins, resulting in the approximately 15 percent surge in finished goods prices from the end of February.
Industry View: Further Price Increases if Situation Persists
The current price level of $1,300 to $1,500 per tonne remains below the peaks seen during the previous spike in 2021, but market caution is mounting.
Industry participants with deep knowledge of China's import flows and Middle East logistics have pointed out that if the deterioration in the Iranian situation is prolonged, celestite price, the primary raw material, could rise further. They are watching the strontium carbonate market closely. Alternative ore supply capacity is limited in the short term, and the tension across the supply chain is expected to persist for the time being.
Downstream Impact: Implications for Ferrite Magnet Competitiveness
The downstream effect that warrants particular attention is the impact on the magnet industry, one of the key end markets for strontium carbonate.
For hard ferrite magnets (strontium ferrite), which are widely used in motors and various electronic components, strontium carbonate is the core raw material that determines manufacturing costs. In recent years, there has been a dynamic of growing market appreciation for low-cost ferrite magnets as a strong alternative to neodymium magnets, which face supply constraints and price volatility risks.
| Key Sectors Affected | Market Trends and Concerns |
| Ferrite Magnets | In recent years, ferrite magnets have attracted growing attention as a stable and cost-effective alternative to neodymium magnets, which carry supply constraints and price volatility risks associated with rare earth elements. However, if the surge in strontium carbonate prices — the key raw material — is prolonged, the overwhelming price competitiveness that represents ferrite magnets' greatest advantage will be eroded. This could alter the competitive dynamics and market share balance between ferrite and neodymium magnets. |
| Specialty Glass and Ceramics | As an additive in LCD glass substrates and ceramics for electronic components, the price increase will also push up manufacturing costs in these applications. |
| Metal Smelting (Zinc, etc.) | Used as an impurity removal agent for lead and other contaminants in electrolytic zinc smelting, higher strontium carbonate costs will also feed through into increased operational costs at base metal smelters. |
Original written by （IRUNIVERSE YT）in Japanese, translated by Mehmet Gönültaş.
