The Zhitong Finance App learned that Guojin Securities released a research report saying that as of April 11, 2024, according to Baichuan Yingfu statistics, the prices of antimony concentrate, antimony ingots, and antimony oxide were 7.6/9.2/80,000 yuan/ton, up 0.66%/1.1%/1.27% weekly. Reviewing past prices, usually within a month after the Spring Festival, antimony mines and smelters gradually resume production, and antimony prices often recover significantly due to abundant supply; however, in this round, prices have risen again with only a slight correction, and the current price has broken through the highest price before the holiday season. Currently, short-term inventories are low, supply disturbances continue, and antimony prices are expected to continue to rise; medium- to long-term traditional demand and demand for photovoltaics are expected to resonate. Domestic difficulties are compounded by weak growth in overseas mining, and antimony supply and demand are expected to continue to improve.
Recommended attention: Hunan Gold (002155.SZ) (gold and antimony double wheel, driving growth), Huayu Mining (601020.SH) (holding the increase in scarce antimony resources), Huaxi Nonferrous (600301.SH) (successful business transformation, rich tin and antimony resources).
The main views of Guojin Securities are as follows:
The off-season is not weak, and prices are rising again
Reviewing past prices, usually within a month after the Spring Festival, antimony mines and smelters gradually resume production, and antimony prices often recover significantly due to abundant supply; however, in this round, prices have returned to rise again with only a slight correction, and the current price has broken through the highest price before the holiday season.
Inventories remain at a historically low level and are constantly being removed. As of the beginning of April 2024, stocks of antimony ingots and antimony oxide were 3840/7030 tons respectively, with an average monthly decline of 9%. Antimony ingot inventories are at a historically low level, close to the level at which antimony prices began in 2021; starting in 2023Q4, the antimony industry chain also showed abnormal storage losses. Antimony ingot and antimony oxide storage ranges were 9% and 4%, respectively. In a situation where domestic mine production did not increase and overseas mine supply was greatly disrupted, demand continued to increase and consume inventory, so antimony ingot inventories fell to a historically low level.
Supply disturbances are frequent, and the recovery of mine-side operating rates falls short of expectations
In mid-March, the third batch of seven provincial inspection teams from the second round of ecological and environmental protection inspections in Hunan Province completed installation; at the end of March, the Xinlong mining industry temporarily stopped production, so the progress of resuming production after the antimony festival fell short of expectations. The recovery rate of antimony ore and antimony ingots after the reduction was only 5/11 pct, which is significantly lower than the previous average of 10/15 pct; while the operating rate of antimony oxide increased by as much as 21 pct, which is significantly higher than the previous 10-15pct level, indicating that terminal demand has recovered better than the mining end and smelting, directly verifying the shortage level at the mine end. Guojin Securities believes that environmental protection inspections will become stricter in the future, and supply disruptions at the mine side may become more frequent.
Demand: Traditional demand benefits the economy is recovering, and PV demand is expected to open up further
1) Traditional fields: The traditional application fields of antimony are mainly antimony flame retardants, and downstream terminals are plastics, rubber and chemical fiber products. As of February 2024, the cumulative value of production of plastic, synthetic rubber and chemical fiber products in China was 1189/142/11.68 million tons respectively, with year-on-year increases of 7.8%, 3.9% and 27.7% respectively. In the short to medium term, the penetration rate of antimony flame retardants is difficult to change greatly. Therefore, the high production of plastics, rubber and chemical fiber products indicates that traditional demand for antimony is strong. However, demand for the above varieties often shows a strong correlation with macroeconomic sentiment. In March, China's manufacturing and comprehensive PMI were 50.8/52.7, respectively, and both expanded to the boom range; with the gradual recovery of China's economy, traditional demand for antimony is also expected to gradually increase.
2) PV demand: According to Baichuan Yingfu, China's photovoltaic glass production increased by 2.3% and 2.9% respectively from February to March 2024; in terms of price, the average price of 3.2 mm photovoltaic glass coating increased by 10,000 yuan/ton in April; SMM predicts that PV module production will still rise sequentially in April, and Jingke Energy expects “a steady increase in production for the second quarter compared to the first quarter”. In March, Longji Green Energy released a new antimonium-containing product “Tairui” silicon wafers. The antimony concentration range may have improved significantly compared to the average level.
Installation boom+unit consumption may increase, and space for antimony in photovoltaics is expected to open up further. Guojin Securities estimates that the global demand for antimony in 2024-2026 was 1465/15.38/160,600 tons, with year-on-year growth rates of 4%/5%/4%, respectively.
Overseas mining growth is weak, and a hard gap helps prices stay strong
Polar Gold's 2024 gold production guidelines are compounded by the decline in gold production in 2024, and the supply of existing overseas antimony ore can be expected to be tightened; the number and scale of new mines are limited, and there is still a large uncertainty about the release schedule. Guojin Securities believes that the supply of antimony will increase or fall short of expectations; considering the increase in domestic mining difficulties under policy restrictions, Guojin Securities predicts that the global antimony supply in 2024-2026 will be 14.05/14.62/152,200 tons, respectively. The year-on-year growth rates are 3%/4%/4%, respectively. The corresponding supply gap is 0.60/0.76/0.84 million tons, respectively. It exists and is gradually expanding, and the price of antimony is expected to continue to rise.
Risk warning
New mine launches exceeded expectations; demand fell short of expectations; antimony flame retardant replacement exceeded expectations.