Rising demand for cadmium from India's unregulated jewellery makers is driving up prices of the metal banned by the Bureau of Indian Standards (BIS) due to its ill effects on health. Spot cadmium in Europe is trading at a near seven-year high of $1.38 a lb and has nearly doubled since the start of 2017. High grade cadmium is at $1.40 a lb, a level not seen since June 2011.
"Strong demand for cadmium in India, mostly for jewellery alloys, was a major driver for cadmium prices in most of 2017," according to a US Geological Survey report. Indian imports of cadmium, used for soldering and as an alloy in gold and silver jewellery, rose to 4489.4 tonnes between January and November last year, a 25 percent rise from the same period in 2016, government data shows.
The Bureau of Industrial Standards, the Indian regulator that approves hallmark licences has banned the use of cadmium and will not stamp any jewellery that contains the metal, which can damage lungs and kidneys. However, a BIS official said the hallmarking process is voluntary and regulating the use of cadmium would be difficult.
"The jewellery manufacturing industry is highly fragmented and is a challenge to regulate," said Sudheesh Nambiath, a senior analyst with GFMS, a division of Thomson Reuters. Nambiath said well-known jewellery making firms do not use cadmium because of the reputational risks, but that cadmium was used by "pigeon hole setups and independent artisans".
Nilesh Gupta, President of the Indian Bullion Jewellers association agreed: "A significant amount of cadmium metal is still used in the manufacturing of jewellery." Industry sources say gold jewellery with a purity stamp or hallmarking, that does not contain cadmium, represent about 40-50 percent of the industry. "We have been educating jewellers not to use cadmium as it affects their health," said Harshad Ajmera, president of the Indian Association of Hallmarking Centres.
"In the next eight to ten months, the Indian government will come out with mandatory hallmarking for all jewellery and it will completely bring down the usage of cadmium." Trading sources say that would mean a price reversal for cadmium, mainly used to make nickel cadmium batteries and pigments in plastic products. The closure of top zinc mines, such as Century in Australia and Lisheen in Ireland, have cut supplies as has an environmental clampdown on polluting industries in China.
Cadmium can be substituted with zinc, but that requires expensive and time-consuming solders and electroplating equipment. China accounted for 36 percent of the 23,000 tonnes of total refined cadmium production in 2017, data from the US Geological Survey showed. India consumed about 20 percent of total cadmium produced in 2017.
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