Antimony prices in China may extend a rally to a record 100,000 yuan ($15,177) a metric ton, after almost doubling last year, as supplies of the metal used in car batteries remain constrained, industry analysts said.
“A move to 100,000 and beyond is not impossible,” said Geng Nuo, a Beijing-based analyst at Great Wall Securities Co. “Even at higher prices, people will still have to buy as there are no real substitutes.”
The silvery-white metal, also used as a flame retardant in electrical appliances, yesterday reached an all-time high of 89,000 yuan ($13,508) a ton in Changjiang, Shanghai’s biggest cash market. Ingot with a minimum purity of 99.85 percent, the main industrial grade, surged 96 percent in 2010.
China, which produces about 90 percent of the world’s antimony, curbed exports and production of so-called minor metals last year to shore up prices and ensure domestic supplies. The country’s commerce minister last month said the controls were part of measures to protect the environment.
“With output in China shrinking, demand just has to be stable to move prices higher,” Peng Bo, an analyst at Guosen Securities Co., said from Shenzhen. “Just as it is for rare earths, China is just trying to protect its resources.”
Chinese exports of rare earths, 17 chemically similar elements used in renewable energy, electric cars and weapons, fell by 9.3 percent last year. China, which supplies 90 percent of the world’s rare earths, raised export taxes and slashed export quotas to rein in pollution and tackle a decline in local reserves.
China increased its 2011 export quota for antimony to 60,300 tons, from 57,500 tons last year, the Ministry of Commerce said on Oct. 28. Still, exports are unlikely to rise because domestic consumers are competing with international customers for dwindling supplies, according to Beijing Antaike Information Development Co.
“China has been selling this stuff far too cheaply in the past few years and the market is now moving towards what is a fair price,” said Yan Lei, an analyst at Guoyuan Securities Co. in Shanghai.
Chenzhou Mining Group Co., the world’s second-largest producer and China’s sole publicly listed antimony miner, is benefiting from higher prices. The shares jumped 41 percent last year on concerns that supply may not keep pace with demand. Great Wall’s Geng and Guoyuan’s Yan recommend buying the stock.
“Bad weather in the south has been hampering output and transportation and deliveries,” said Deng Xinrong, a Beijing-based analyst at Founder Securities Co. Winter storms stalled traffic and cut water and power supplies to regions in south and southwest China in the past three weeks, the Ministry of Public Security said Jan. 22.
The city government of Lengshuijiang in central Hunan province, China’s largest producing region, cut power supplies to smelters and shut mines for safety inspections in April last year as part of a crackdown after thousands of children were poisoned by pollution from lead smelters.
“Many of the smelters never re-opened,” said Yang Xueling, Antaike’s senior antimony analyst. Producers will be merged and qualified companies must reach a minimum annual capacity of 5,000 tons and meet emissions standards, the Lengshuijiang government said.
The land ministry stopped accepting applications for new antimony and tungsten mines, it said in March. China capped last year’s antimony output at 100,000 tons, compared with 90,180 tons in 2009. Producers of antimony, tungsten and rare earths must sign an agreement to keep within a production quota, the China Land Resource Network said in August, citing the Hunan branch of the Ministry of Land and Resources.