Tellurium

Key Applications:

• CdTe thin films in solar cells
• BiTe semiconductors
• rubber applications

Key Producers:

• 5N Plus
• Asarco
• Aurubis

Key End Markets:

Increased demand from the consumer electronics industry has been driving the Tellurium market, while solar energy, thermoelectrics and metallurgy should be the main drivers in the coming decades. Thin-film technology development in Europe alone could soon consume 90+% of current annual Tellurium production. The US Department of Energy expects Tellurium to reach "near-critical" supply levels by 2025 due to growing demand from renewable energy.

Supply Characteristics:

Tellurium is a rare metalloid, with just three parts per billion in Earth's upper crust. The element is part of the chalcogen family, along with oxygen, sulfur, selenium, and polonium. Only two deposits in the world, in Sweden and China, recover Tellurium as a primary ore. According to the US Geological Survey, annual worldwide production of Tellurium is estimated at 490 tonnes, of which about 15% comes from these two deposits (with China the leading producer). The most significant production of Tellurium is as a byproduct of copper mining. Based on the amount of Tellurium contained in copper and associated reserves, and assuming 50+% recovery from refining processes, we estimate global Tellurium reserves to be around 30,600 tonnes.

The ore processing used to isolate gold and silver is not suitable for recovering Tellurium; instead, copper needs to be refined by the electrolytic process, which explains the very limited sources of Tellurium. On average, Tellurium concentration ranges 1-4% during the electrolytic process, but as much as 9% in some refineries.

In March 2021, Rio Tinto announced it would begin construction of a new plant to recover Tellurium from copper refining at its Kennecott mine near Salt Lake City, extracting approximately 20 tonnes of the valuable mineral per year from waste streams. Rio Tinto expects to begin production of Tellurium in the fourth quarter of 2021, creating a new North American supply chain for this critical mineral. The company noted that Tellurium is an essential component of cadmium telluride, a semiconductor used to manufacture thin film photovoltaic (PV) solar panels.

Price Dynamics:

In 2004 the price of Tellurium sharply increased from $20/kg to almost $400/kg due to increased demand in the electronics industry. In 2005, China's electronic sector made up 16.6% of the country's economic growth and its added-value output 7% of GDP. Manufacturing was growing the fastest, and driving metallurgical demand for Tellurium.

SMM Information & Technology provides a historical Tellurium price chart from May 2018. The Tellurium price reached a high of around $92/kg in April 2018, but dropped significantly to $50/kg at the end of 2019 after the Yunnan Provincial government in China announced an auction of 170 tonnes of tellurium from the collapsed Fanya Metal Exchange (FME), with a starting price of $43/kg (RMB306/kg), or a total lot bid of US$7.34m. Another factor behind the collapse may have been the fact that bismuth, calcium, lead, phosphorus, selenium, and sulfur can be used in place of Tellurium in many free-machining steels, albeit with lower efficiency or product characteristics, while sulfur or selenium can replace it as vulcanization agents.

However, in April 2021, the Tellurium price rebounded to $85/kg, against the general backdrop of rising metals prices and increasing Tellurium demand from the solar energy industry. Solar photovoltaic production in China is likely to stimulate Tellurium prices further in the near term.

Forecast CAGR for key industries of applications:

Technavio, which monitors the Tellurium market, estimates it will grow by 60m tonnes during 2020-24, a CAGR of about 3%. Allied Market Research valued its main end market, global solar energy, at US$52.2bn in 2018, projecting it to reach US$223.3bn by 2026, a CAGR of 20.5%.