Flat demand weighs on Chinese antimony prices
Flat demand amid the economic slowdown during the global Covid-19 outbreak is widely expected to outweigh production cuts and pressure China's antimony market in the short-term, according to market participants.
Prices for 99.65pc grade metal were last assessed at 35,000-36,000 yuan/t ($4,919-5,060/t) on 14 May, the lowest level since 30 August 2019, as producers were unwilling to make price concessions because of tight profit margins. Prices are expected to fall below this range this week to a four-year low.
Supply
The Covid-19 outbreak that prolonged China's lunar new year holiday reduced production during January-February, while the impact of the pandemic outside of China has prevented producers from running at full capacity in March.
Domestic antimony metal production during January-March fell by 19pc from 20,872t a year earlier. Output in March alone fell by 11pc from a year earlier to 6,394t but increased by 79pc from 3,580t in February after most producers resumed operations, data released by the China nonferrous metals industry association show.
Demand
China's antimony metal exports reached 2,842t during January-March, up by 5.45pc from 2,695t a year earlier, as many international consumers replenished stocks in late February amid concerns about supply shortages during the coronavirus outbreak in China. Many exporters had to postpone shipments to March when logistics services completely resumed.
But international demand has fallen sharply since mid-March when the Covid-19 crisis escalated in Europe and the US, the main consuming regions for antimony. Key exporters in China are focused on fulfilling long-term contracts and have not secured many renewed orders from consumers.
A fall in export demand for plastics and fibers has in turn affected domestic demand for antimony.
Production in antimony's downstream industries including fibers, synthetic rubber and plastics has all fallen from a year earlier. Output of plastics during January-March dropped by 23pc from the previous year to 15.15mn t. Productions for automobiles, refrigerators and air-conditioners, which consume antimony as a flame retardant or alloys, fell significantly in the first quarter.
Flat demand is likely to push some smaller antimony producers to sell off stocks at lower prices to generate cash flow, while thin profit margins are expected to prevent prices from dropping too much, according to market participants.
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