Manufacturers that depend on tantalite, also known as columbite-tantalite or coltan, want to be able to predict tantalite price to plan ahead for price fluctuations. Predicting commodity prices has always been a challenge but analysts can make educated guesses about whether tantalite price is headed up or down if they understand the most influential factors.
The leading market for tantalite is the manufacture of tantalum capacitors used in a variety of electronic devices, and tantalite price tends to follow the popularity of new technologies. For example the release of the Sony PlayStation 2 in the year 2000 was followed by a spike in the price of the ore, and as demand for the gaming console fell so did coltan prices.
Another price spike in 2011 has been attributed to the sudden rise in demand for smartphones and tablet computers. Smartphones were becoming commonplace. The release of the iPad and Android tablets in 2010 and 2011 drove the demand for tantalite higher. Although the U.S. has historically been the major market for these kinds of devices, the demand from China for high-end electronics was actually a stronger driving force behind this price spike.
Tantalum is also a key component in jet engines, nuclear reactors and orthopedic implants but these markets don't experience the kind of demand spikes seen in consumer electronics.
In any market, when demand spikes, suppliers look for ways to meet the increased order volume. The tantalite market was no different. After the tantalite price spike in 2000, companies re-opened mines that had previously been unprofitable to run. Unfortunately when prices drop, some of these mines close again creating an unreliable tantalite source.
The growing pressure on companies to avoid Congolese coltan has buyers looking to different parts of the world for their ore needs. This is giving countries incentive to explore for new tantalite deposits so additional mines may increase supply, dropping prices further.
Supply and demand are two major influences on tantalite price but there are other issues to consider as well.
Demand for electronics, and therefore tantalum, is only going to increase. It remains to be seen whether rising supply will counteract that rising demand and exert a downward pressure on tantalum price.