A potential rise in spot supplies is likely to pressure Chinese bismuth prices, following the restart of a plant operated by key domestic producer Hunan Jinwang, according to market participants.
Hunan Jinwang is expected to restart its Xiangxin plant in July following a suspension since 2019 caused by financial issues. It was producing 200-300 t/month before the closure. Domestic minor metals producer Vital Materials will rent the plant in July with the restart.
The Xianxi plant launched production in November 2012 with some of its production lines then suspended in November 2018. All of its lines were closed by the end of January 2019 and have been in heat preservation since.
Argus yesterday assessed prices for 99.99pc grade bismuth metal at 34,000-35,500 yuan/t ($4,813-5,025/t) ex-works, down from Yn34,500-36,000/t on 4 June amid reduced demand from the downstream alloy and chemical industries.
Exports in April rose by 89.54pc from a year earlier to 159,412kg but were down by 30.61pc against March, after buyers purchased ample stocks in the previous months and opted to operate from inventories amid reduced demand during the Covid-19 pandemic. Exports are estimated to fall have fallen in May against a year earlier and April because of lower demand from outside of China because of the pandemic.
The 19,228t bismuth stocks from the bankrupt Fanya metal exchange remain a threat to the spot market in the longer term. Kunming Rongke New Materials bought the stocks from an auction held by China's Yunnan provincial government on 23 November last year.
China's nonferrous metals industry association early this year estimated that domestic bismuth output fell by 1,613t from a year earlier to 13,631t in 2019. Weaker physical demand amid an economic slowdown in China, coupled with US-China trade disputes outweighed output cuts to cause a supply surplus of 1,468t in 2019. Market participants expect bismuth prices to face long-term downside potentials because of the surplus supplies.
