Antimony prices hit a 12-year high! Mineral materials are so tight that "one or two can't be bought" How long can the high prosperity last?

Finance Associated Press, January 21 (Reporter Liang Xiangcai) "Antimony ingots are out of stock, the existing raw materials can only maintain a month's production, we are now in China is one or two materials can not be bought, the price is rising every day, and we dare not sell." Zhou Gang, the person in charge of an antimony smelter, told the Financial Associated Press.

Since the beginning of the New Year, the price of antimony has been accompanied by troubles. A number of interviewees in the industry told the Financial Associated Press reporter that due to the intensification of the shortage of upstream mines, the entire industrial chain is "nervous", and there are large mining enterprises that have signed long orders in the pain of ceding profits, and some smelters will face the dilemma of "no rice in the pot", and the sentiment of downstream reluctance to sell is still high, and this high prosperity is expected to continue.

In terms of ore ends, including Hunan Gold (002155. SZ), Huayu Mining (601020. SH), Huaxi Nonferrous Metals (600301. SH), Industrial Yinxi (000426. SZ), the four major A-share non-ferrous metal companies, account for nearly a quarter of China's antimony ore resources.

Antimony prices hit a 12-year high

According to Choice data, as of January 19, the average price of 1# antimony was 88,300 yuan/ton, an increase of nearly 10% from the end of last year, and the price hit a new high in nearly 12 years.

1# antimony price trend since 2007 (data source: Choice)

The shortage of ore is the most important factor in the rise in antimony prices in this round, Zhou Gang told reporters: "It is because there is no raw material to cause the price to rise, even the two major local mining enterprises in Hunan are very tight, mainly with imported ore factories may have some raw materials in hand." ”

In addition, a relevant person of an antimony enterprise of Minmetals Group sighed to reporters: "From the upstream antimony concentrate, to the midstream smelter, as well as the downstream finished product end, as well as traders, etc., there is almost a low inventory or even zero inventory state."

The staff of Huayu Mining told the reporter who consulted as an investor that the antimony-containing concentrate produced by the company is in short supply, and the payment is collected in advance in the form of advance payment.

Chen Qiqi, an antimony analyst at Shanghai Ganglian Rare and Precious Metals Division, told reporters that the current rise in antimony prices is mainly affected by both supply and demand, although it is in a high position, but it is still within the normal range. At present, the market supply has shrunk compared with the previous period, the inventory is at a low position, and the supply-side price adjustment has the bottom support. The recent pre-holiday stocking has also provided some momentum for the rise in antimony prices.

It is worth noting that antimony, as an important "industrial monosodium glutamate", is basically difficult to replace in military industry, aerospace, flame retardant, photovoltaic and other application fields, and has been included in the list of scarce minerals at home and abroad.

It is reported that the tin mine located in Lengshuijiang City, Hunan Province, is known as the "World Antimony Capital", which is currently mainly operated by the Shining Star Antimony Industry under China Minmetals, which has antimony metal reserves of about 300,000 tons, and antimony products account for about one-third of the domestic market and about a quarter of the world.

What is the quality of the four major mining enterprises in A-shares?

Among the A-share listed companies, the four major non-ferrous mining enterprises, including Hunan Gold, Huayu Mining, Huaxi Nonferrous Metals, and Xingye Yintin, account for nearly a quarter of the domestic antimony resources.

Hunan Gold said at its performance briefing in April last year that the company's antimony ore reserves were 304,000 tons. Taking 2022 as an example, a total of about 30,000 tons of antimony products will be produced, of which 18,600 tons are its own raw materials, and the rest will come from outsourcing.

In fact, Hunan Gold has become the invisible leader of the A-share antimony industry. According to Choice data, from January to June 2023, the company's gold revenue accounted for 92.21% and profit accounted for 55.65%, while although the company's antimony products accounted for only 6.73% of the total revenue in the same period, due to the high gross profit margin, the profit accounted for 41.24%.

It should be noted that due to factors such as mine safety, a number of mines in Hunan Gold, including the Xinlong Mining Headquarters, which mainly produces antimony ore, were suspended last year. Affected by this, the company's production capacity in the first half of last year was less than expected, the announcement showed that in the first half of 2023, the self-production of antimony products was 8,880 tons, a year-on-year decrease of 19.46%, and the self-production of gold was 2,268 kilograms, a year-on-year decrease of 7.97%.

As for the latecomer Huayu Mining, the amount of antimony resources in its hands should not be underestimated. According to the company's 2023 semi-annual report, the controllable antimony resources of Talu Gold Industry invested (50% equity) in 2017 are 263,100 metal tons, which has exceeded the domestic 158,200 metal tons.

It is reported that Ta Al Gold was officially put into operation in July 2022, and is currently in the stage of capacity ramp-up, with an annual output of 16,000 metal tons of antimony concentrate after reaching production, and later with the new project in Tibet and Ta Al Gold reaching production, the company will have an annual output of 21,000 tons of antimony metal, which will control nearly 15% of the global supply of antimony metal.

However, Huayu Mining is not as expected in the release of antimony minerals in Tajikistan. According to the company's production and operation data published in 2023, the production of antimony concentrate was disclosed only in the third quarter, which was 469.21 metal tons, which is far from the planned output of 5,200 tons that year.

In this regard, the staff of Huayu Mining told the reporter who consulted as an investor that because the newly put into operation of the tower aluminum gold industry still needs more debugging, and at the same time, in terms of raw ore mining, "if the antimony raw ore is not mined, there will definitely be no corresponding production." ”

A person familiar with the industry told the Financial Associated Press reporter that subject to the restrictions of Tajikistan's relevant policies, "at present, only gold production is allowed and antimony production is restricted, so it is difficult for the company to sell more ore in the short term." ”

In addition, Xingye Yinxi said on the investor interactive platform on January 15 that the antimony concentrate contained in the silver-lead concentrate and silver-copper concentrate produced by the company was sold in the form of mixed powder, and the amount of antimony metal in the resource reserves of Yinman Mining was 204,400 tons.

For Huaxi Nonferrous Metals, which just completed its restructuring last year, the current equity metal amount of antimony is 153,000 tons, which is mainly sold in the form of lead-antimony concentrate, which currently accounts for a relatively small proportion of the company's performance.

According to the data of the National Bureau of Statistics, as of 2019, the identified resource reserves of domestic antimony ore and metal were 3.435 million tons, according to which the total antimony resources owned by the above four companies in China were about 820,000 tons, accounting for nearly a quarter.

The high prosperity is expected to be maintained

As for the future antimony price, the interviewed industry insiders are more optimistic.

"In fact, as a smelter, the rise and fall of prices does not affect us very much. However, judging from the upstream and downstream contacts, this year's mining will be twice as tense as last year. This year, the price of antimony (1# antimony) may exceed 100,000 yuan/ton. Zhou Gang told reporters.

The reporter of the Financial Associated Press noticed that the price of antimony fell from a high level after the Spring Festival last year. In this regard, some industry insiders told reporters that the main reason is that the antimony ore with a backlog of nearly 100,000 tons in the Russian polar gold mine during the three-year epidemic was sent to China at the beginning of last year, but according to the annual output of 30,000 tons or 40,000 tons of the mine, the ore grade of about 10 degrees is difficult to make up for the domestic supply and demand gap.

Shining Star antimony industry related people told reporters that in the context of antimony is irreplaceable and difficult to recycle, domestic large-scale antimony mines are facing the problem of declining grade after years of mining, and there is a strong demand expectation in the downstream photovoltaic glass field, so they are still optimistic about the future antimony market.

Hunan gold related people also said that if antimony raw materials remain tight, then antimony prices will also rise.

Chen Qiqi believes that domestic antimony ore is mainly in the hands of large factories, and part of it is mainly for self-use, foreign imported antimony ore is unstable, and the follow-up market supply may be reduced but the reduction is limited. Antimony prices are still mainly rising in the short term, but because they are already at a high position, the increase cannot be determined, and it is difficult to continue to rise sharply. At the same time, there is a great deal of uncertainty in demand and policy after the year, which will also affect price changes.

It is worth mentioning that sodium pyroantimonate as a clarifier for photovoltaic glass has brought a new growth point in the demand for antimony. Some analysts believe that antimony is an unavoidable element in the clarifier of photovoltaic glass, and it accounts for a small proportion of the production cost of photovoltaic glass, and is less sensitive to antimony price.

Guojin Securities mentioned in this month's research report that the antimony industry has been undersupplied for a long time, and the gap between supply and demand has pushed up antimony prices. On the supply side, it is difficult to increase domestic antimony resources, and the progress of overseas Kangqiao antimony mine and Solonechenskoye project may be less than expected, and it is estimated that the global antimony supply and demand gap from 2023 to 2025 will be 1.9/2.3/24,000 tons respectively. On the demand side, the high increase in photovoltaic installed capacity has driven the demand for antimony for glass clarifiers, and the global demand for antimony is expected to be 13.8/14.7/155,000 tons in 23-25 years.

(Zhou Gang is a pseudonym in the article)

(Finance Associated Press reporter Liang Xiangcai)