Supply of raw materials is tight, sellers hold back, how will antimony price move after breaking through the 100,000 yuan/mt mark? SMM comments

Geopolitical conflicts and UK and US sanctions on Russian metals have made it difficult for antimony ores from foreign mines such as Russia to enter China. In addition, several mines in China had accidents before, and the environmental protection inspection team entered Hunan in May, which led to a short-term shortage of domestic antimony raw materials and a stronger reluctance to sell in the market. This has also stimulated speculative demand, causing antimony prices to rise recently. In less than a month, it has risen by nearly 11 %, and its average price has even broken through the 100,000 yuan/ton mark. How will antimony prices perform after hitting multi-year highs?

The average price of 1# antimony ingots exceeded 100,000 yuan/ton, up nearly 11% in less than a month

According to SMM, on May 6, the price of 1# antimony ingot ranged from 100,500 yuan/ton to 101,500 yuan/ton, and its average price was 101,000 yuan/ton. On April 29, the average price rose to 100,000 yuan/ton. In less than a month, the average price of 1# antimony ingot increased by 10,000 yuan/ton, an increase of 10.99%.

According to SMM, some market insiders said that the recent rapid rise in antimony prices was mainly due to the strong reluctance to sell in the market. Some market insiders said that the core problem of the antimony industry now is low inventory, and some large factories in Hunan have low inventory. On the supply side, the market expects that the supply of Russian Polyus Gold may be shelved in the future, making the supply of raw materials even tighter; that, coupled with the previous accidents in several domestic mines and the environmental protection inspections in Hunan in May, has made many market participants bullish on antimony prices. Antimony prices have soared. Moreover, some market participants believe that the previous rise in antimony prices was due to the fact that the photovoltaic industry's strong use of antimony has accelerated the destocking of antimony stocks. However, as the the antimony demand in the photovoltaic industry chain has tended to weaken, antimony consumption may be affected.

The output of antimony ingots and sodium antimonate increased significantly in March compared with the previous month, and is expected to continue to increase in April.

Output

According to SMM statistics, China's antimony ingot (including antimony ingots, crude antimony conversion, cathode antimony, etc.) production in March 2024 was actually 5816.151 tons. Compared with 4429.22 tons in February this year, the overall output increased significantly by 31.31% month-on-month. Due to the shortage of raw materials and the fact that factories were closed during the Chinese New Year holiday, production in February saw a significant drop. Therefore, the sharp rebound in production in March was also expected by the market. However, due to the shortage of raw materials, some new manufacturers have stopped production. Overall, the output of most manufacturers has increased to varying degrees. Therefore, compared with February, the output in March also showed an overall substantial increase. At present, raw material resources are still relatively concentrated in the hands of some factories, and many manufacturers still find it difficult to resume production or continue to increase production. Currently, 16 of the 33 SMM survey respondents have stopped production, one more than last month; 16 manufacturers have reduced production, one less than last month; and one manufacturer has basically remained in normal production, one more than last month. SMM predicts that antimony production in March has clearly returned to its normal operating cycle. The national antimony ingot output in April 2024 is likely to continue to grow compared with March 2024.

According to SMM's survey and statistics on major sodium antimonate manufacturers, China's sodium antimonate production in March 2024 was 4,102 tons, a significant increase of 33.18% from 3,080 tons in February. The output rebounded again after a sudden decline last month. However, market participants generally said that the recovery in production in March was within expectations. The main factor was the Chinese New Year holiday, and many factories stopped production during the holiday, resulting in an excessive decline in production in February. Among the 11 surveyed companies, one was still closed for debugging in March, and the production of other sodium antimonate manufacturers was on the rise. Only three companies had a decrease in production to varying degrees. Some manufacturers stated that since April, the raw material stocks of terminal manufacturers restocked before the Chinese New Year holiday have gradually decreased, and the purchase of additional sodium antimonate raw materials has also increased significantly. Therefore, it is expected that the output in April will remain at a relatively high level. At present, sodium antimonate manufacturers are still generally optimistic that the output of photovoltaic manufacturers will continue to rise in 2024, and the demand in the photovoltaic industry is expected to perform well. SMM predicts that China's sodium antimonate production will most likely increase slightly in April.

Imports of antimony ore and its concentrates in March decreased slightly from the previous month, but increased significantly from the previous year.

According to data released by the General Administration of Customs, China's import volume of other antimony ores and concentrates in March 2024 was 4101.79 tons. The import volume was down compared with the 4516.44 tons imported in February and the 4385.04 tons imported in January. However, compared with the import volume of 2,489.36 tons in the same period of 2023, there has been a significant year-on-year increase.

Forecast

In summary, the market is currently bullish due to the tight short-term supply relationship. On the supply side: we need to pay attention to the import situation of antimony ore at the supply port and the production situation of the antimony industry chain such as antimony ingots and sodium antimonate pyroxanite. In terms of demand, SMM will continue to follow the changes in demand for antimony in the photovoltaic industry chain in the future. In addition, we also need to pay attention to the impact of antimony prices on downstream consumption after hitting a multi-year high.

Institutional Voice

Huafu Securities Research Report stated: Imports of other precious metal ores from Russia declined significantly in March, the domestic antimony raw material shortage continued. Antimony product output can hardly increase. From the demand side, the demand for traditional flame retardant production has recovered, and the increase in PET production is expected to continue to drive the demand for catalysts. Photovoltaics output maintains high growth. In the short and medium term, the tight inventory of raw materials can hardly be solved, and the purchases will continue to drive up prices. As of the end of April, the price of antimony ingots has exceeded 100,000 yuan/ton, and may remain strong in May; in the long term, we are still optimistic about the demand for antimony driven by photovoltaic glass. Risk warning: Downstream demand is lower than expected, and the increase in Russian antimony ore imports is higher than expected.

A research report by Sinolink Securities pointed out: The current inventory of antimony ingots is at a historical low and continues to be destocked, and the inventory of antimony oxide has accelerated from a relatively high position at the beginning of the year to a historical medium-low level (only higher than 2021, and lower than the same period in 2022-2023). Sinolink Securities believes that the shortage of raw materials may be further transmitted from the smelter to the antimony oxide link, and the supply shortage will be further aggravated; according to our estimates, the actual domestic antimony consumption and end-user consumption in January-March increased by 7% and 16% year-on-year respectively. End-user consumption was stronger than actual consumption, indicating that invisible
inventory continued to be destocked. With strong production of photovoltaic glass and stable demand for flame retardants on the demand side, antimony prices are expected to continue to rise, and the price range is expected to break through the historical high of 110,000 yuan/ton (April 2011). In the medium and long term, expectations for tightening overseas antimony ore supply are increasing. The price of antimony is expected to continue to rise as inventories remain at a low level.

CITIC Construction released a report saying that the price of antimony ingots rose by 4.1% and the price of antimony oxide rose by 4.6% last week. On the supply side, Russia's Polyus has not yet started bid solicitation for 2024. This, coupled with the unstable situation in Myanmar that has affected antimony ore production and exports, has exacerbated the domestic shortage of antimony ore recently. On the demand side, the demand for photovoltaic glass continues to increase, and the demand for flame retardants is expected to pick up amid the recovery of the electronics cycle. With tight supply, growing demand and continued inventory reduction, the price of antimony is expected to continue to rise.