Ore shortages, demand to support China antimony prices

Chinese antimony prices have risen to the highest level since April 2019, supported by a shortfall of concentrate supplies caused by lower imports and depleting domestic resources.

Argus last assessed prices for 99.65pc grade metal at 44,000-45,000 yuan/t ($6,801-6,955/t) yesterday, up by Yn1,000/t from Yn43,000-44,000/t on 12 January. Prices bottomed out at a four-year low of Yn34,000-35,000/t on 26 May 2020 but then rebounded, as limited profit margins, tight concentrate supplies, higher pollution costs and a recovery in demand following the easing of Covid-19 restrictions in China prompted many producers to lift offer prices in the second half of 2020.

Tight spot availability

A 5,000 t/yr metal smelter in the main production hub of Lengshuijiang city in Hunan province has halted output because of insufficient feedstock supplies. Most private-sector producers in the city have suspended output and withheld material from sales because of the ore shortage.

A Shanghai-based trading firm has stopped quoting prices as it is unable to secure metal with bismuth higher than 100ppm from smelters in Yunnan and Guangxi provinces

Mining operations at China's largest antimony producer Hsikwangshan Twinkling Star have been idled for most of the past year because of the expiration of its mining licence, according to market participants.

China produced 56,900t of antimony concentrate in the first 11 months of 2020, up slightly from 56,300t from a year earlier, according to statistics released by the China nonferrous metals industry association (CINA). But CNIA's output data for 2020 might include some double counting and should be revised down by 10-15pc from 2019 to take into account production cuts and closures in Hunan and Guangxi provinces, market participants said.

China imported 41,939t of antimony concentrate in January-November 2020, down by 26.2pc from 56,811t in the same period of 2019, as the Covid-19 pandemic weighed on production and shipments in some supply countries since April last year.

A resurgence of Covid-19 cases in China since late December has forced the countrty's customs agencies to introduce strict quarantine measures. This, coupled with the expected absence of logistics services during the 11-17 February lunar new year holiday, will continue to pressure China's concentrate imports.

Most metal producers have been withholding material from sales since late December given limited inventories. Only two or three producers in Lengshuijiang city are holding stocks, while most others have depleted inventories. One metal producer in Yunnan province has suspended output until March after selling all of its stocks to a consumer in Guangxi province at Yn44,000/t.

Renewed stockpiling interest

Stockpiling interest from trioxide producers is rising ahead of the lunar new year holiday, amid a focus on fulfilling deliveries signed at the end of December. Consumers from the plastic, rubber and catalyst sectors have also entered the market to restock for requirements around the holiday.

International consumers have also shown higher buying interest because of tight spot supplies in Europe and the US. Export firms have raised offer prices to keep pace with the higher domestic prices, a stronger yuan against the US dollar and freight costs caused by a shortage of containers. Export prices were last assessed at $7,200-7,400/t fob on 14 January, hitting the highest level since 2 April 2019.