In the second half of May, antimony prices soared from already high levels following exacerbating supply constraints, with ingot orders in China of over US$20,000/t rumoured on the 24^th Mat 2024 for the first time.

Argus Media also reported its European antimony price up 14% week-on-week with further indications of the US$20,000/t mark being breached. The surge follows a prolonged period of elevated antimony prices in place since Q2 2021. According to Project Blue’s antimony market data, the industry fell into a deficit in 2021 and for the first time in history, Chinese ingot smelters had become critically reliant on imported antimony concentrates, unable to keep prices in check.

The market stabilised in 2023 with a boost in supply from Polyus (more details on Polyus below), although remaining at elevated levels between US$10-12k/t. Project Blue forecasts the market to fall back into deficit in 2024 and recent price data indicates that this time the supply could cause some structural changes to the antimony market.

To understand the details, it is worth reflecting on how the antimony industry has changed over the last decade.

2011 – the previous price surge

Chinese antimony mine production peaked in the late 2000s and started a rapid decline forcing the market to draw down stock by the end of 2010 and tightening up into 2011. Monthly average prices of antimony ingot peaked at close to US$17,000/t in April 2011.

At the time, the use of antimony was effectively split into two key functions, with nearly 90% of antimony used in flame retardants and lead-acid batteries. On the flame retardants side, high prices drove substitution and in our base case forecast consumption in flame retardants could only return to its 2010 peak by the late 2050s. The decline in demand has also been underpinned by improved efficiencies, such as the use of masterbatches. For lead-acid batteries, the switch to valve-regulated lead-acid (VRLA) batteries reduced the intensity of use for the metal with the downward demand trend exacerbated by electric vehicle penetration over the last few years.

In addition, secondary supply from end-of-life lead-acid batteries has seen secondary supply ramp up from around 30% of global antimony supply in 2010 to 50% since 2021. Secondary supply has significantly relieved pressure on primary mine supply, but as China’s secondary industry matures growth will slow.

Supply diversification and an import reliance for China

Additional secondary supply played a crucial role in maintaining a market balance for antimony, but the rate of decline in Chinese mine supply has necessitated new sources to enter the market. The main reason for China’s declining mine supply has been exhausting resources and reserves together with consolidation of small-scale mining that has continued into 2022. In 2023, a growing supply gap saw support for mining of lower-grade antimony ores and the first new mining licence to be granted in China for quite some time as smelters were starved of feedstock availability.

Russia, Tajikistan and Bolivia have been a steady source of antimony supply for over two decades already and continue to be pivotal to the market balance. In the early 2010s, Australia’s Costerfield mine, South Africa’s Consmurch mine and Canada’s Beaver Brook mine were all crucial additions to support a rapidly declining supply in China. Only the Costerfield mine remains in operation under Mandalay, but is itself facing exhaustion and slowing output as the company mines hot on the tails of brownfield reserve expansions.

In the mid-2010s, Myanmar surfaced as a new source of consistent supply and ramped up mine production to over 5kt of contained antimony since 2020. Conflict in Myanmar has contributed to declining supply since 2023. There are several other sources of antimony, including small-scale artisanal mining (ASM) production that our data shows can account for as much as 2kt of contained antimony in a given year when prices are high enough.

In 2023, China accounted for less than 45% of global antimony mine supply, however, in 2021 and 2022 the market share oscillated back to 50%. The wild swings in market share are not related to production in China, which has slowed its decline, but follow mining patterns of Russia’s top gold producer, Polyus.

Polyus entered the antimony world in 2018, with its Olimpiada mine instantly becoming the world’s largest antimony source, shifting a growing deficit in 2017 into a structural surplus. However, over the last six years, production has been volatile and output volumes are linked not only to the geology of the Olimpiada deposit, but also to the gold price. At the best of times (from the perspective of antimony), revenues from antimony only account for around 1%, in stark contrast to gold, therefore firmly slotting in as a minor by-product stream for the company. Crucially, when maximising antimony output, the mine accounts for 10-15% of global antimony supply.

New smelters removing concentrate units from China

While mine supply has diversified, so has ingot supply. China is still by far the largest producer of ingot, but for the industry outside of China, which was reliant on effectively 100% Chinese supply in 2010, the reliance has dropped to less than 30% since 2021.

Tajikistan, Vietnam, Myanmar and Thailand are now major suppliers of antimony ingot as diversified supply away from China for Western consumers, noting that Vietnam itself largely consumes Russian concentrates, although not from Polyus. Tajikistan’s Anzob-operated mine (with US ownership) was a major provider of low-cost concentrates to China. With the ramp up of ingot production since 2014 and selling into the Western markets, China has lost access to as much as 10kt of contained antimony feedstock.

In Oman, the Oman Antimony Roaster built by SPMP has a capacity of 20ktpy, but the company has struggled to source consistent feed to support its ramp up and is offline again this year. Trade data suggests the selling stockpiled concentrates to China on occasion from Oman.

Both the new ingot supply that has helped diversify European and US imports of ingot and the tightening of concentrate availability have removed crucial units to China. China’s largest ingot smelter is thought to have bought in additional antimony ingot in 2023 to support its antimony trioxide output needed for flame retardants and the new growth market in solar PV glass.

Antimony demand receives a glimmer of growth

In 2023, solar PV installations in China soared to record levels. Antimony has gone along for the ride, as the use of sodium antimonate improves the efficiency of solar panels in several ways. China’s industry participants suggest demand levels of 30-50ktpy in solar applications in 2023. The wide range in estimates reflects the additive nature of its use. While not critical, the improved efficiency by using more sodium antimonate can support fewer panel requirements to meet energy generation targets - making antimony a key feature of energy transition.

We expect demand for antimony in solar PV to fall off in 2024 and 2025 as new installations in China decline and recent US tariffs from the Biden Administration aim to reduce imports of Chinese solar PV panels. Nevertheless, according to Project Blue, a ramp-up in installations globally and a focus on efficiency being key for energy transition, solar PV could underpin a return to growth for the antimony industry over the long term. Our base case estimates solar PV to account for over one-third of non-metallurgical antimony demand by 2050.

Volatile supply from the largest mine amid potential new demand growth

The uncertainty of mine supply volumes from Polyus over the last few years has removed optimism for new antimony projects looking to enter the market amid lackluster demand growth. Several of China’s main antimony miners and some gold smelters have adjusted processing flow sheets to accommodate lower-grade antimony and higher-grade gold concentrates from Polyus.

There are only a few advanced projects in the pipeline, with a Chinese-Tajik JV, Talco Gold, the most significant one in terms of volumes. However, the mine has focussed on gold units amid record gold prices. One could, however, expect the current pricing landscape to help kickstart the flow of additional antimony units from the mine. In the USA, Perpetua’s Stibnite mine also has the potential to produce up to 10kt of contained antimony in its peak year, however, only for a limited number of years according to published feasibility studies. The project is still facing ongoing challenges for its environmental permits, with a recent setback in an air permit being pulled back. Most other projects are also gold focussed, which will see antimony continue to be reliant on increasing by-product supply.

Polyus was effectively absent from the antimony market in 2021 and 2022, with the gold industry performing well and kicking off a trend to record prices following the COVID-19 pandemic and global economic woes. This plunged the market back into deficit and supported prices above US$10,000/t while stocks were being drawn down from Polyus’ initial surge into the market between 2017 and 2020. In 2023, Polyus returned as the largest supplier of antimony concentrates for the second time, however, sanctions from Europe and USA following the war in Ukraine meant that Chinese smelters looking at the export market were cautious to take un units from Russia. This has meant that China has been increasingly absent from the ingot export market.

Project Blue understands that there are stockpiles available in Russia, enough to support our forecast 10kt Sb deficit for 2024, but exports have been held back as Russia looks to claim additional extraction tax revenues from any gold production together with the removal of exchange rate export duties to encourage export, effective 1 June 2024. For the time being, the antimony market needs to contend with the world’s largest supplier acting as swing production.

What will the antimony market look like in 2024 and beyond?

Antimony demand in flame retardants has continued to decline into 2023, although at a slower rate. Demand was expected to recover last year, with increasing electrification and a recovering construction industry (the latter not materialising) supporting a return to growth. However, the market has turned to be supply-driven and a tightening supply-dmand balance has seen demand drop further.

Substitution threats were kept at bay with a US$14,000/t ceiling in 2023, but a combination of constrained supply from Russia and Myanmar has pushed prices to levels where we are likely to see reduced antimony consumption across its applications. With the removal of Russia’s exchange rate export duty from 1 June onwards, we could see prices relax as material starts to flow again, however, concerns around sanctions from the West from Chinese traders could see a cautious start as Chinese and Russian officials establish new mechanisms. The influx of materials from Russia could support the Chinese ingot industry for 2024, but regional demand will continue to be undersupplied if sanctioned Russian supply is the only source of relief. The historical ASM swing supply levels of no more than 2kt of contained antimony will not be able to overcome the estimated shortfalls.

In the near term, the market balance for 2025 will be dependent on mine plans from Polyus in Russia and Talco Gold in Tajikistan. Record gold prices will continue to put antimony units in an uncompetitive second position for both companies’ bottom lines. Output from the Olimpiada mine therefore will largely remain volatile based on the deposit’s geology and mine plan. In our base case scenario, we expect demand to fall back further over the next 18 months, unless new supply sources are accelerated into the market. Project Blue forecasts a market balance to return in 2026.

Longer term, support for a growing antimony market will require four key features to keep prices below the substitution price ceiling. (1) Chinese mine supply curtails its systemic decline with new projects together with other primary antimony mines in Myanmar and neighbouring countries. (2) Continued growth in secondary antimonial lead supply and other recycled sources, as well as (3) declining demand from lead-acid batteries thanks to the rise of EVs, reducing requirements of virgin ores for metallurgical applications. (4) By-product antimony supply reaches a steady state that removes large volume swings year-on-year and supports new projects in the rest of the world to come to market. These will nevertheless require an increased industry cost of supply and Project Blue forecasts prices to remain elevated over the medium term.