The liquid crystal display (LCD) market is a relatively
bright spot for indium fabricators despite a recent slowing
after four years of incredible growth.
That means orders received by fabricators from LCD
manufacturers and everyone in between should stay positive,
given that indium is used in a transparent conductive
indium-tin oxide coating that LCDs simply can't do without. As
such, indium supply for LCDs is expected to remain positive for
decades, although it could be somewhat volatile, fabricators
Almost 90 percent of indium consumption is accounted for by
LCDs, which make up nearly half the global television market,
according to AIM Specialty Materials USA, a Cranston,
R.I.-based alloyer. Almost all consumer electronic devices
require an LCD. Indium also is used in solar and battery
applications. AIM believes that indium-tin oxide demand will
rise to 2,193 tons in 2009 from 1,755 tons in 2008.
Another factor driving indium demand is the enlargement of
LCD screen sizes for such electronics as the Apple iPod and
growing incorporation of touch-screen interfaces into LCDs,
which could lift the amount of indium used per panel. Small LCD
screens can even be found under kitchen cabinets.
While the economic crisis is impacting the LCD industry, the
dent doesn't appear to be anywhere near as deep as in other
sectors. LCD glassmaker Corning Inc., Corning, N.Y., recently
revised its growth estimates in the glass market for 2009 to 15
to 25 percent from 20 to 25 percent previously.
That's "outstanding" for a bad economy, according to AIM
sales manager Brian O'Neill.
Indium Corp., a Utica, N.Y.-based fabricator, said its
business growth will keep outpacing flat panel market growth,
which is estimated at 4 percent from 2008 to 2015, according to
figures from Austin, Texas-based research firm DisplaySearch.
It points out that LCD TVs are in a maturing market but will
have a higher replacement cycle than the antiquated indium-free
cathode ray tubes. That difference, in turn, will help fuel
About 70 percent of Indium Corp.'s revenue comes from flat
panels, 10 to 15 percent from batteries and 15 percent from
solar applications. Expectations are that 40 percent of indium
demand will come from the solar market within three years.
Much of the current negative economic news has already been
absorbed by indium fabricators like Indium Corp. when LCD and
indium-tin oxide manufacturers decided to slice inventories in
the third quarter of 2008. Still, the company is cautious about
inventory levels, with LCD growth forecasts still cloudy for
2009. So far, Indium Corp. anticipates a growth rate of 18
percent for hand-held devices, computers and TVs, down from 30
percent during the past five years. Rapid industrialization in
China and India is driving a continued strong demand outlook
for new notebook computers, the company said.
"The impact from the recession is going to be minimal,"
Claire Miko, Indium Corp.'s sales manager in Europe, said with
caution. "With the current economic problems, people will
travel less but will still need to stay connected, so they will
continue to buy systems and computers."
Although fears of low indium supplies are pervasive in the
LCD world, Indium Corp. said the metal is three times more
abundant than silver, which is produced at a rate of about
25,000 tons annually vs. 500 tons for indium. With adequate
investment and open communication by refiners, extractors and
recyclers, supply should flow smoothly, the company said.
"Certainly in my lifetime and my children's' lifetime there
will be enough indium around the world to supply whatever needs
there are," said Gregory Phipps, Indium Corp.'s vice
Indium Corp. studies show that current exploited mines and
probable reserves combined can cover 60-plus years of supply.
Projected supply from virgin and recycled indium in 2009 will
total 1,749 tons, up from 1,478 tons in 2008, it said. Indium
largely is a byproduct of zinc concentrate, with China being
the world's top producer of primary indium.
Open communication has been key to keeping supplies
balanced, a lesson learned by Indium Corp. and other industry
players, who since 2005 have been much more transparent with
their data. A miscommunication between suppliers and LCD makers
led indium prices to jump more than tenfold to $1,100 per
kilogram in 2005 vs. 2002 levels, Indium Corp. said. Stiff
competition for indium among the LCD makers at the time-some
booked orders with up to three suppliers simultaneously to
guarantee supply-led to a bottleneck that caused prices to
The company said it hopes that open communication will allay
fears over the availability of material even as a search for
indium-tin oxide substitutes continues. Companies like AIM
believe it is unlikely that LCD makers will replace indium-tin
oxide anytime soon, given the hundreds of billions of dollars
they've already invested in indium-tin oxide coatings.
Plus, ITO is cheap-prices could triple from present levels
without having much of an impact on overall LCD costs. AIM
estimates indicate that indium costs roughly 10 cents per
square foot and is at historical lows due to fierce competition
in the indium-tin oxide target business. LCD cost reductions
will typically focus on the backlight modules and on increasing
production yields, AIM's O'Neill said.
Some 548 tons of indium will originate from primary
suppliers in 2009 compared with 485 tons in 2008, according to
Indium Corp., while reclaimed indium will contribute 1,201 tons
vs. 993 tons in 2008.
Indium Corp. said that a drop below $500 per kg would result
in production cutbacks, and pegged prices in a range of $500 to
$1,000 per kg for the next few years, depending on reliability
AMM's free-market indium price hit $725 per
kilogram at the end of April, up from a range of $400 to $475
per kg earlier in the month. While prices slipped to around
$545 per kg in November, they remain far above the November
2003 average of $285 per kg.
Traders and speculators are playing a diminished role in
influencing pricing, according to Miko. "Businesses now deal
directly with the consumer," she said.
Prices could rise in the coming months in the wake of the
shutdown of many Chinese zinc mines amid falling demand, and
concerns of excess supply could drive prices higher, although
Phipps points out that moderating LCD growth could help balance
supply and demand.
"There are a few too many variables to make a solid forecast
about prices, but considering that indium production in the
next six months looks unlikely to increase because of the
problem with zinc prices and that demand continues to grow,
especially in the solar market, maybe they will increase," Miko