Refining catalysts: Cycles

How a rare earth squeeze sent catalyst prices soaring

Refining catalyst prices are negotiated privately, so the cycle shows up in supplier earnings rather than in a price series. Demand follows refinery throughput and the number of hydroprocessing reloads due each year, which bunch up. Costs follow rare earth and molybdenum prices. The floor is set by the need to keep FCC units running: catalyst is a few cents per barrel, so refiners rarely cut it. The ceiling is set by trials and switching to rival suppliers. Over the long run, falling petrol demand caps FCC volumes, while hydroprocessing and renewable fuels gain.

No public catalyst-minus-input spread exists. Ketjen's adjusted EBITDA margin (about 14% in 2025) and Topsoe's EBIT margin before special items (8.9% in 2025, 10.1% in 2024) are the best public signals.

Booms and busts

1. 2010-2012

   China cut rare earth export quotas. Lanthanum prices soared, FCC catalyst makers imposed surcharges and launched low-rare-earth grades.

   Lanthanum oxide rose from a few dollars a kg to over $100/kg at the 2011 peak (indicative, widely reported); Grace developed REpLaCeR grades in 2010 (policyrisk.com)

2. 2020

   Covid lockdowns cut refinery runs and deferred hydroprocessing reloads; catalyst volumes and margins fell across suppliers.

   not public; prices fixed by contract

3. 2024-2026

   FCC volumes and favourable mix lifted Ketjen's margin, but Albemarle impaired the business and sold control to private equity, a sign that public chemical groups see refining catalysts as mature.

   Ketjen sales $1,036 million (2024) to $1,066 million (2025); adjusted EBITDA $131 million to $150 million, margin about 12.7% to 14.1%; goodwill impairment $181 million and asset impairment $246 million in 2025 (Albemarle)

What drives the cycle

• Refinery utilisation. FCC catalyst additions scale with feed rate and feed quality; heavier, metal-rich crude needs more catalyst.
• Fuel sulphur rules. Rules such as BS-VI and IMO 2020 drive hydrotreater capacity and catalyst activity requirements.
• Rare earth and molybdenum prices. Pass-through raw material costs; China controls lanthanum supply.
• Petrol demand and propylene demand. Electric cars erode petrol demand; refiners shift FCC towards propylene and petrochemicals.
• Renewable diesel and SAF mandates. New hydroprocessing demand for vegetable oil and fat feeds.

Metrics to track