Antimony metal and trioxide: down and up

Policies to control pollution in China have been a game changer for the country’s antimony industry in the past two years.

The city of Lengshuijiang, and its wider home province of Hunan in central China, are known as the antimony capitals of the world and both have been affected by the government’s clampdown on pollution since 2015.

Despite this, China remains the world’s biggest producer of antimony, accounting for around 80% of global production.

Because antimony metal is used as a feedstock for antimony trioxide, its pricing has a direct effect on the price of the chemical, which is used in flame retardants, heat stabilising materials and lead-acid batteries.

After the value of antimony metal spiked in March 2011, when monthly average in-warehouse prices reached $16,228-16,928/tonne, according to Metal Bulletin, elevated producer stocks in China coupled with lower consumption in Europe and North America set prices for antimony trioxide and metal on a steady downward trend (see Figure 1).

This decline lasted until December 2015, when environmental interventions in China began to affect the market.

Rebound in antimony metal and trioxide markets

Since early 2016, visits by officials from the Chinese government’s Environmental Protection Bureau to antimony production plants in the Lenshuijiang area and other cities in Hunan have been a frequent occurrence.

Several antimony producers, including the world’s biggest producer, Hsikwangshan Twinkling Star Co. Ltd, have been forced to halt production on several occasions as a result of these inspections.

These stoppages significantly reduced supply of antimony metal. In the second half of 2016, rumours that China’s State Reserve Bureau planned to purchase 10,000 tonnes of antimony for its National Stockpile exacerbated the impact of this supply squeeze, pushing up prices.

The reduced availability and higher prices of antimony metal in the market soon affected trioxide prices, leading to a slow but progressive increase in the value of the chemical since early 2016 (see Figure 2).

Although much stronger than they were two years ago, antimony metal prices are still far off the highs of March 2011.

Antimony MB free market in warehouse $ per tonne monthly average prices currently stand at $8,211-8,538/tonne, according to Metal Bulletin's 31 August market assessment.

Antimony trioxide prices meanwhile, (99.5% Sb₂O₃, 20 tonne lots FOB China) are in a range of $7,470-7,600/tonne, according to IM’s 12 September market assessment.

Further interruptions to Chinese domestic production are anticipated as China’s government continues its efforts to tackle pollution. This is expected to push up prices further if consumption trends remain steady at current levels, or strengthen.

As increases to date have been gradual, buy-side reaction to the price appreciation has been measured. If prices for antimony metal begin to move up sharply, however, this is likely to spur panic buying by trioxide producers and other metal consumers, especially if any jump in the market coincides with China’s winter production closures.