HardAssetsInvestor

Written by Tom Vulcan  |

August 04, 2008

Rhenium: Son Of Moly

Details

In addition, rhenium is used by the military, particularly in its stealth aircraft, to help control the heat from jet engine exhausts, and in the production of rocket thrusters, chambers and nozzles where both its extreme resistance to heat and stability are of particular importance. (Rocket thrusters made using rhenium have been tested through 100,000 thermal fatigue cycles without failing.)

Two further uses of rhenium as an alloying metal are worth noting. First, when combined with boron, the resulting compound - rhenium diboride - is harder than diamond. And, second, when combined with silicon to form silicon cage clusters, the resulting clusters are particularly stable. This property could, in future, prove important both in the building of nanostructures and, in particular, so-called quantum computers.

Rhenium Supply

Rhenium is essentially a by-product of a by-product, extracted from molybdenum, which is itself a by-product of mining porphyry copper deposits. Nobody actually mines rhenium. Rhenium is usually extracted from the flue gases and dust produced in roasting molybdenum concentrates. (In Kazakhstan, however, it also exists in sedimentary copper deposits.)

Roskill Information Services Ltd, the London-based metals and mineral research house, estimated world production of rhenium in 2007 to have been just 50.45 metric tonnes. And while it estimated production at some 48.69 metric tonnes in 2006, with the release of some 15 metric tonnes from stocks, around 72 metric tonnes actually entered the world market that year. Whatever the figures for the last two years, rhenium is, in absolute terms, a very rare metal.

The world's largest producer of rhenium is Chile, followed by the U.S. and then Kazakhstan. (USGS figures, however, show Kazakhstan producing some 8 metric tonnes of rhenium in 2007 - just a tad more than the 7.3 metric tonnes produced by the U.S. last year.)

World Rhenium Production - Primary¹ (Metric Tonnes)

Source: Roskill (USGS; Roskill; Powmet)

Notes:

¹ Produced as a by-product of molybdenum processing

² Based on reported exports of rhenium metal and APR (ammonium perrhenate)

World Rhenium Production - Secondary¹ (Metric Tonnes)

Source: Roskill (USGS; Roskill; Powmet)

Notes:

¹ Produced from recycling catalysts, super-alloys and other rhenium-containing scrap

² BASF secondary production takes place in both the USA and France

World Total Reserves (Metric Tonnes)

Source: USGS

The Current Market Situation

Currently, supply and demand for rhenium is very finely balanced. According to Roskill, over the last decade demand has grown from "perhaps 35,000kg to an estimated 65,000kg" with supply barely keeping pace. And, indeed, over the past couple of years the market has tightened considerably.

With USGS figures for the "apparent consumption" of rhenium in the U.S. alone at 51.8 metric tonnes in 2007 (2006: 46.8 metric tonnes), current demand certainly appears

to be outstripping mined supplies, with the remaining demand being met by the release of stocks (mainly from Kazakhstan) onto the market. If, as would seem likely, demand continues to increase, this raises the important question of just what stocks actually remain to be released to fill the gap. According to some industry sources, current supply just about equals demand from the top three users alone.

And demand does look as if it is set to increase. Not only are high aviation fuel prices and increasing environmental concerns forcing airlines to be more fuel efficient, but, in addition, the new rhenium super-alloy turbine blades that can help them achieve this efficiency now require a rhenium content of up to 6%, when, previously, it was only 3-5%. Of the civil aircraft manufacturers, Boeing alone "expects to supply 475-480 commercial planes this year and 500-505 in 2009, up from 441 planes in 2007." Its European rival, Airbus, is set to deliver some 470 this year and up to 453 in 2007.

The U.S. military has targeted a production of some 3,000 F-35 aircraft and 6,000 engines, all of which would use third-generation nickel-based super-alloys containing 6% rhenium, as will the 700 or so F-22 Raptors scheduled for production.

Both an increased use of rhenium in catalytic converters in petroleum refining, and the use of the metal in technology currently being developed to convert gas to liquid could bring further, severe, pressure to bear on the market.

The price of rhenium has, subsequently, soared around tenfold in the last five years. As an indicator, BASF is currently (end-July) quoting the metal at $10,582 per kg ($4,800 per lb). In mid-July, this elicited such article titles as "Super hot metal rhenium may reach "platinum prices"" (Reuters).