(Huang Di) the operating logic behind the SMM interpretation of the price rise of antimony, bismuth, indium and gallium in 2021 [small metals conference]

"Click to view details

At the 2021 small Metal Industry Summit hosted by SMM Information & Technology Co., Ltd. (SMM), Huang Di, a small metal analyst at SMM, introduced antimony, bismuth, indium and gallium under the linkage of macro and fundamentals. Huang Di pointed out that at present, the price of raw materials for smelting antimony ingots has risen sharply, resulting in a substantial increase in the production cost of antimony in The processing price difference between antimony ingot and antimony concentrate should be at least 15000 yuan / ton in order to ensure the basic cost and benefit of antimony ingot manufacturers.

Antimony, bismuth, indium and gallium under the linkage of macroscopic and fundamental aspects

In the post-epidemic period, global economic restart and growth is the first logic of the transaction. April 2020 is the bottom of the global economy. China rebounded quickly in March before the world, and in the euro zone in May, the United States was disturbed by a second epidemic, and the economic recovery was postponed to June. After entering 2021, the marginal improvement of China's manufacturing industry has slowed, while the economies of Europe and the United States have entered a range of rapid expansion. Observe that the rapidly rising new orders and order inventory of the US manufacturing PMI, indicate strong demand, while the rapid decline in customer inventory means that there is still room for demand growth.

The United States has entered a new replenishment cycle, and there is room for further replenishment. After the economic restart, the United States continued to improve demand and early production constraints led to low inventory, the United States "passively" into the replenishment cycle. Us manufacturing inventory growth is about eight months behind PMI year-on-year growth, and inventory growth has turned upwards. The replenishment speed of different links is different, the inventory-to-sales ratio of retailers and wholesalers is far from the pre-epidemic level, and the replenishment space is larger than that of manufacturers.

"Click to apply for SMM database

At present, the global vaccine popularity has increased, and the vaccine vaccination rate has increased significantly, but it is still necessary to guard against the recurrence of the novel coronavirus epidemic.

Inflation expectations driven by global excess liquidity are another logic for rising commodity prices. The "Bubble" of Q2 global liquidity and the resumption of production pushed copper prices higher in 2020, but China's M1 growth continued to slow in February 2021, indicating that the economy may face some downward pressure. Domestic monetary policy is "stable" and does not make a sharp U-turn, but loose liquidity cannot be equated with loose monetary policy.

Investment in housing and stock markets in the United States is still the first choice, and the rise in real estate has boosted consumption.

The gap between production and demand in the process of overseas economic repair depends on imports. The strong demand driven by large-scale stimulus in developed countries compared with the supply side constrained by the epidemic, in the context of a simultaneous increase in "volume" and "price", China's export volume data recorded a high growth. Domestic PPI is mainly affected by investment and export demand, which adjusts rapidly upward under the general rise in commodity prices, but the transmission from upstream raw materials to downstream consumer industries is not smooth, and CPI picks up slowly.

After falling sharply in early 2015, the prices of antimony ingots and refined bismuth rebounded at the beginning of 17 years, then shook down again, reached a low in May 2020, then bottomed out, reached a stage high in early 2021 and then fell back. It has risen again in recent months, surpassing the high at the beginning of the year and reaching a new high at the stage.

"Click to view SMM metal prices

The price trend of gallium is even weaker this year, falling after reaching phased highs at the beginning of the year, showing an overall downward trend this year, and prices have stabilized in recent days. Refined indium fluctuated at the beginning of the year, but prices have risen continuously recently.

"Click to view SMM metal prices

At present, the price of raw materials for antimony ingot smelting has risen sharply, resulting in a substantial increase in the cost of antimony ingot production The processing price difference between antimony ingot and antimony concentrate should be at least 15000 yuan / ton in order to ensure the basic cost and benefit of antimony ingot manufacturers.

Indium production is divided into primary indium (refined indium directly from primary ore) and recycled indium (at present, it mainly refers to refined indium processed by recovering waste scrap of target material). In the past two years, the number of refineries engaged in electrolysis has increased, and the output of crude indium is not high. due to environmental protection, there are basically no manufacturers specializing in the production of crude indium, with the exception of self-employed. The vast majority of zinc sulfate manufacturers produce crude indium, and most enterprises produce less crude indium; because of environmental protection, they are mainly concentrated in remote areas in central China, with more in Hunan, Jiangxi, Guizhou and Sichuan. The supply of indium-containing raw materials in China has been improved, but the production capacity of refined indium in the first category of enterprises is limited, while the second category of enterprises are plagued by qualification, environmental protection and capital problems. Therefore, once the market is not good, production may also be reduced.

Global demand for indium is expected to be about 1750 tons in 2021. ITO targets (used for the production of liquid crystal displays and flat screens) are the main consumption area of indium ingots, accounting for 70 per cent of global indium consumption, followed by electronic semiconductors, accounting for 11 per cent of global consumption, solder and alloy sectors accounting for 12 per cent, photovoltaic films accounting for 4 per cent, and other areas accounting for 3 per cent. Considering the repeated recycling of indium, the indium metal consumption is 4.04mg/W. The new installed capacity of the world is expected to increase to the year of 2000GW/ by 2035. If we do not consider other technologies and only consider the end of HJT and HJT+ perovskite stack, it is expected that the maximum increment may reach 8000 tons / year. If only 200GW is taken from 1max 10, it is also expected to bring 800t to the HJT industry chain.

SMM predicts that the growth rate of antimony bismuth indium gallium supply from 2020 to 2021 varies, with a significant decrease in production except indium, and a significant decrease in the production of some varieties.