Minmetals Securities: Supply is Strong and Weak in the Second Half of the Year, Antimony's Phase Price Turning Point May Have Appeared

MMG Securities released a research report stating that the release of accumulated raw material inventory in Russia in the first half of the year will suppress the upward momentum of antimony prices. However, whether actual supply can be formed still requires price cooperation. If the domestic and foreign markets continue to be inverted, it will inhibit domestic smelters from purchasing raw materials. On the demand side, the production of photovoltaic glass has significantly decreased, and antimony exports will also slow down due to the impact of new domestic policies, which will impact the pace of exports. The lack of upward momentum in antimony prices in the year may lead to a phase turning point. The main points of MMG Securities are as follows: The abnormal supply at the mineral end has led to a significant increase in antimony prices in the first half of the year. In the first half of 2024, the domestic antimony production decreased, combined with the unsmooth transportation of Russian raw materials, the tight raw materials drove the price of antimony up, and the domestic antimony ingot price approached 160,000 yuan/ton, with an annual increase of 89%. Whether the price of antimony can rise to a new high after reaching a historical high point depends on the pace of raw material supplementation and downstream carrying capacity, with Polar Gold being one of the main variables in raw material supply. Accumulation of Polar Gold inventory may partially relieve raw material tension in the second half of the year. Why did the production of antimony from Polar Gold increase substantially in 2023? Based on data such as rock mining volume/ore extraction volume/gold production in the announcements, it can be concluded that the reason for the substantial increase in production is not the market's understanding of handling a large amount of accumulated inventory. Due to tax and payment issues in the first half of 2024, the floatation ore has not been fully sold, accumulating 6.5 tons of gold inventory in the first half of the year, and a large part is concentrated in floatation ore, with an accumulated antimony metal inventory of about 10-13,000 tons. The company is expected to form sales in the second half of the year; in terms of annualization, the annual production is expected to be 17,000 tons, which is lower than the previous year by 10,000 tons. In the long-term perspective, the production of antimony is still in a decreasing state. Improvement in flame retardant consumption, reduction in photovoltaic glass production may cloud short-term demand. The current downstream consumption of antimony mainly focuses on flame retardants, with production in the first half of 2024 better than expected. According to the production of flame retardants in listed companies that can be tracked, major producers showed growth in production in the second quarter. The daily melting amount of photovoltaic glass reached a turning point in August-September, with short-term cooling causing a decrease in production of photovoltaic glass and a temporary slowdown in demand for antimony in photovoltaics. Risk warning: Macro-economic fluctuations; impact of border trade policies on goods circulation.