European antimony hits 9-year high on tight supply

Shipping delays, a raw material shortage in China and the approaching lunar new year holidays have pushed antimony metal prices in Europe to a record high, but beyond the first quarter the outlook is unclear.

Prices for trioxide and grade two metal rose by $150/t to $13,250-13,450/t in-warehouse Rotterdam on 11 January, pushing past the previous nine-year high of $13,150-13,400/t set at the end of October. Prices dipped in Europe in November-December, falling by around 3pc, but have quickly rebounded as supply tightened again on low stocks in Europe and long lead times for deliveries.

The price high in October was driven by falling metal production in China, caused by government mandated temporary production suspensions at smelters for environmental inspections. Chinese metal production finally ramped up towards the end of the year following smelter restarts and the return to production of China's largest producer, Twinkling Star, after a long outage. Freight rates in November and December from China to Europe also finally began to ease after doubling or even tripling during the height of the container shortage. As a result, European prices slipped to $12,700-13,000/t on 2 December from $13,150-13,400/t in-warehouse Rotterdam on 26 October. A sharper drop was prevented by the small amount of material available for sale in Europe, with suppliers reluctant to secure new material in a falling market, and market expectations that the ore shortage had eased but was not over. China's antimony reserves have heavily depleted over the years and it now imports large amounts of antimony concentrate from Latin America and and Asia. This supply was severely disrupted by the pandemic and even after an increase in supply at the end of last year Chinese imports and domestic concentrate production have continued to fall compared with previous years.

Supply side factors dominate

European spot demand has been changeable and at times extremely low compared with the larger US market but the scarcity of material and the difficulty in securing and delivering supply to customers has kept prices high and at a historically wide premium over Chinese export prices (see chart).

Freight rates from China to Europe have returned to more manageable levels, with market participants reporting rates of $8,000-11,000 for a 25t container. But actual transit times from ports in Guangdong in southern China to European coastal destinations have ballooned to as much as three months from loading compared with a maximum 30-35 days before the pandemic. This has forced suppliers to repeatedly turn to the spot market to fulfil contractual obligations with customers, a situation that has been exacerbated by the upcoming lunar new year holidays on January 31-4 February, during which Chinese markets and transport infrastructure will be closed.

As such, near-term prices are likely to remain at extremely high levels. But looking further ahead the number of variables is high, as market participants try to gauge the economic outlook, changes in demand, improvements in shipping and logistics, the overall impact of the Covid-19 Omicron variant and the amount of ore that will be available to metal producers.

By Caroline Messecar

Antimony prices China, Europe$/t