The short term is limited by seasonal production cuts before the Spring Festival, and by resource endowments in the medium to long term. The increase in the supply of antimony ore at home and abroad is limited.
The Zhitong Finance App learned that Everbright Securities released a research report saying that as of January 15, 2024, the price of domestic antimony concentrate (50%-60%) was 72,000 yuan/ton of metal, up 5.1% from December 15, 2023; the price of low bismuth antimony ingots was 8,6868 yuan/ton, up 7.4% from December 15, 2023, a new high since 2012. The bank believes that supply will be disrupted in the short term and that medium- to long-term increases will be limited, and it is optimistic that antimony prices will rise. The short term is constrained by seasonal production cuts before the Spring Festival, and the medium to long term is limited by resource endowments. The increase in domestic and foreign antimony ore supply is limited; however, demand for photovoltaics has increased significantly, and the supply and demand gap in the industry is expected to expand further, and I am optimistic that the antimony price center will move upward.
Recommended attention: Hunan Gold (002155.SZ), Huaxi Nonferrous (600301.SH), Huayu Mining (601020.SH), leading antimony industry leaders.
The views of Everbright Securities are as follows:
Short-term: Tight supply of concentrate combined with demand for replenishment supports higher antimony prices.
The recent rise in antimony concentrate and antimony ingot prices is mainly due to tight antimony ore and low inventories of antimony ingots by manufacturers. 1) According to Baichuan Yingfu data, as of December 2023, the operating rate of domestic antimony concentrate companies was 37.84%, down 3.2 percentage points from November; due to environmental protection and other factors, the operating rate of antimony concentrate declined over the years before the Spring Festival. 2) According to Baichuan Yingfu data, the current inventory of antimony ingots in the factory has dropped to 4,340 tons, down 2,360 tons from the 2023/1/27 high. It is already at a low level since May 2022. In order to cope with the reduction in antimony concentrate production around the Spring Festival, manufacturers are in need of replenishment.
Long-term: Stock resources are exhausted, and new supply is limited.
1) Domestic: According to USGS, since 2011, China's antimony ore production has dropped from 150,000 tons to 60,000 tons in 2022, a decrease of 60%. The main reason is resource depletion. The decline in China's antimony ore production has also reduced global antimony ore production from 178,000 tons in 2011 to 110,000 tons in 2022, a decrease of 38%. 2) Overseas: As of November 2023, the only antimony ore projects to be put into operation overseas were Huayu Mining in the Kangqiao section of the Tajin project in Tajikistan (production capacity 16,000 tons/year, officially put into operation in July 2022) and Russia's Solonechenskoye mine (production capacity 60,000 tons/year); as of November 2023, the recovery rate of the Antimony production line of the Takin Project did not meet design requirements, and progress fell short of expectations.
New demand: The compound growth rate of antimony demand in the photovoltaic industry from 2022 to 2025 was 31%.
Bloomberg New Energy predicted in November 2023 that the number of new global PV installations will be 413/511/531 GW in 2023/2024/2025. According to the CPIA's estimate that the penetration of photovoltaic double glazing modules will increase to 60% in 2025 (40% in 2022) and the sodium pyroantimonate consumed by current modules, the global demand for antimony in the photovoltaic sector will increase from 204,000 tons in 2022 to 461,000 tons in 2025, and CAGR will reach 31% in 2025.
Balance between supply and demand: The antimony industry has a shortage of 1.9/2.3/25,000 tons in 2023-2025.
The bank adjusts antimony demand in the photovoltaic sector based on the supply-demand balance sheet of the report “Supply as Subtraction, Demand Has an Antimony Industry Dynamics Report” published in March 2023. According to the updated PV installed capacity, the supply and demand gap for the antimony industry in 2023-2025 is expected to be -1.9/-2.3/-25,000 tons (negative values indicate shortages), and the gap widens slightly year by year.
Risk warning: the risk that the progress of antimony ore production exceeds expectations; the risk that environmental policies limit the demand for brominated flame retardants; the risk that demand for photovoltaic glass falls short of expectations.