INSIGHT: Possible US mineral tariffs threaten chem, refiner catalysts

HOUSTON (ICIS)–The US is taking steps that could lead to tariffs on imports of up to 50 critical minerals, many of which are used to make catalysts for key processes used by refiners and chemical producers.

If the US ends up imposing the tariffs on the critical minerals, then they would take the place of the reciprocal tariffs.

REFINING CATALYSTS AND AROMATICS MARKETS
Fluorspar is used to make hydrofluoric acid, a catalyst used in alkylation units. These units convert isobutane and propylene into alkylate, a high-octane blendstock.

Cerium and lanthanum are used to make catalysts for fluid catalytic cracking (FCC) units. These units convert gas oils into gasoline and refinery grade propylene (RGP).

If the US imposes tariffs on these catalysts and if the tariffs cause large enough price increases, then refiners could alter their operations to reduce their costs.

If refiners lower alkylation operating rates, they may rely on other high-octane blendstock such as toluene or mixed xylenes (MX).

Changes in alkylation and FCC rates would concurrently affect supply and demand for RGP.

ANTIMONY AND PET
Chinese restrictions on antimony already have led producers to propose price increases for polyethylene terephthalate (PET), which relies on the mineral as a catalyst.

If the US imposes tariffs on antimony, then it would further increase prices from the other countries that export the mineral to the US.

BISMUTH AND POLYURETHANES
Bismuth is used as a catalyst for making polyurethanes. One such bismuth-based catalyst won an innovation award.

OTHER CATALYSTS
Iridium, neodymium, rhodium, ruthenium, ytterbium and yttrium are all used to make catalysts, according to the US Geological Survey (USGS).

Palladium and platinum are used in catalytic converters in automobiles.

TIO2 AND PAINTS MARKETS
The US also considers titanium and zirconium as critical minerals.

It is unclear if the US would impose tariffs on titanium metal or titanium oxide. However, the US list of critical minerals implies that the tariffs could include titanium oxide.

Titanium oxide is the feedstock that is used to make titanium dioxide (TiO2), a white pigment that is used to make paints opaque.

Producers of paints and coatings are already facing higher costs from US tariffs on steel. In 2023, Sherwin-Williams estimates that plastic and metal containers made up 15% of its product’s costs.

A tariff on titanium oxide would further increase costs for paints and coatings producers.

Zirconium is a byproduct of processing mineral sands that contain titanium. TiO2 producers Tronox and Chemours operate such mines.

Tronox’s are in Australia and South Africa, and Chemours has mines in the US states of Florida and Georgia.

FLUORSPAR AND FLUOROMATERIALS
Fluorspar is also the upstream feedstock for fluorochemicals and fluoropolymers.

Polyurethane foams use fluorochemicals as blowing agents.

Fluoropolymers include Teflon. These are becoming increasingly important in 5G equipment, semiconductor fabrication plants and lithium-ion batteries. Fluoropolymers are also used as membranes in hydrogen fuel cells and chlor-alkali plants.

BARITE, CESIUM USED IN OIL PRODUCTION
Barite is used to make drilling mud.

Cesium is used to make cesium formate drilling fluids, which are used by oil and gas producers.

FLAME RETARDANTS
Aluminum and antimony are used to make flame retardants.

INVESTIGATION TO PRECEDE ANY TARIFFS
Before the US imposes any tariffs on critical minerals, it will conduct an investigation under section 232 of the Trade Expansion Act of 1962. The US has used that section to impose tariffs on other products such as steel and aluminium.

The scope of the investigation will include the 50 minerals deemed critical by the USGS, processed critical minerals and derivative products.

Derivative products include semi-finished goods and final products “such as permanent magnets, motors, electric vehicles, batteries, smartphones, microprocessors, radar systems, wind turbines and their components and advanced optical devices”, according to the order.

The secretary of commerce will have 180 days to submit a final report of the investigation to the president. Recommendations will include tariffs and policies the US could adopt that would promote more production of critical minerals.

LIST OF CRITICAL MINERALS
The following table shows the minerals that the US considers critical.

Aluminium	Magnesium
Antimony	Manganese
Arsenic	Neodymium
Barite	Nickel
Beryllium	Niobium
Bismuth	Palladium
Cerium	Platinum
Cesium	Praseodymium
Chromium	Rhodium
Cobalt	Rubidium
Dysprosium	Ruthenium
Erbium	Samarium
Europium	Scandium
Fluorspar	Tantalum
Gadolinium	Tellurium
Gallium	Terbium
Germanium	Thulium
Graphite	Tin
Hafnium	Titanium
Holmium	Tungsten
Indium	Vanadium
Iridium	Ytterbium
Lanthanum	Yttrium
Lithium	Zinc
Lutetium	Zirconium

Source: USGS

Insight article by Al Greenwood

(Thumbnail shows a fuel pump that dispenses gasoline, which relies on critical minerals for production. Image by Shutterstock.)