On Sunday the 1st of September, the rare earths arm of state-owned China Minmetals placed the winning bid for antimony ingot and rare earth inventories formerly held by the failed Fanya Metal Exchange. Minmetals was the sole bidder for the online auctions, paying RMB780.4M (US$108.8M).
Prior to the auction, the release of Fanya’s 18.6kt antimony ingots had aroused concerns for many Chinese antimony suppliers amidst a declining antimony price, with the Asian Metal Chinese ex-works prices for antimony ingot (99.65% Sb) already down 29.7% year-to-date by end-August.
With prices approaching a similar level to the previous low-point experienced in 2016, the question remains: How far can the antimony price decline? Especially concerning export markets, which are feeling further downward pressure from a depreciating Chinese renminbi. The release of the Fanya material adds additional downside risk as it is equivalent to over 15% of annual primary antimony supply. Market participants and producers had adopted a conservative production plan with a “wait-and-see” attitude until the auction took place.
With the current antimony price already putting many Chinese producers under strain, Minmetals’ next action of how to deal with this large stockpile remains a big question. Minmetals, itself a major integrated producer of antimony ores, ingot and trioxide, may have secured strategic stock to weather low prices.
More information on the antimony market and the supply-demand dynamics that govern the industry can be found in Roskill’s 13th edition of the Antimony: Global Industry, Markets & Outlook published in 2018, which is kept up to date with quarterly reports and access to the analysts.