Bull market in non-ferrous metals? Minor metals entering a skyrocketing trend, with antimony prices soaring. How do we view this market situation?

While the market's attention is still focused on AI and Siasun Robot & Automation, the small metal sector suddenly ignites with passion, becoming the center of market trading. On March 7th, the A-share and Hong Kong stock markets were overall under pressure and volatile, but the small metal sector surged against the trend, creating a sensational surge in trading limits! Industrial metals and rare metals all surged, with gains exceeding 2%, and more than ten individual stocks such as Tibet Huayu Mining, Hunan Gold Corporation, and Guangxi Huaxi Nonferrous Metal all strong limit up, with funds pouring in crazily. At the same time, prices of small metals such as antimony, indium, and gallium also saw significant increases, with some varieties hitting new highs. 01 Antimony prices soar, related stocks skyrocket In this current small metal market, antimony has become the star. Antimony-related concept stocks such as Tibet Huayu Mining, Hunan Gold Corporation, and Yunnan Tin Co., Ltd. all rose, with Tibet Huayu Mining, the core concept of antimony metal, hitting limit up for 4 consecutive days and a weekly gain of as high as 47.8%. This is especially remarkable against the backdrop of the A-share market's continuous weak volatility. The rise in concept stocks is mainly driven by the sharp rise in antimony prices. Looking at antimony price data in China over the past 15 years, it is found that in recent times antimony prices have hit nearly a 12-year high: the price of antimony ingots in Hunan soared from 142,000 yuan/ton in early February to 162,500 yuan/ton in March, a single-month increase of 12.6%! European prices even skyrocketed to $14,950/ton, causing a widening gap between domestic and foreign prices and speculative funds flooding in. From a fundamental perspective, the rise in antimony prices is not a short-term phenomenon, but rather driven by a mismatch in supply and demand. As an important industrial metal, antimony has a wide range of applications, particularly in the areas of new energy, batteries, and defense industries, with strong demand. The tightening supply situation further exacerbates market speculation. 02 Core reasons for the sharp rise in prices: pressure on the demand and supply side of antimony Nicknamed the "industrial MSG", antimony is widely used in flame retardants, battery alloys, semiconductors, optical materials, and defense industries. Among them, antimony-based flame retardants account for over 60% of global consumption and play an indispensable role in industries such as new energy vehicles and electronics. Additionally, antimony is also used in the production of high-performance lead-acid batteries, suitable for energy storage, communications, and power tools, among other fields. This year, with the rapid development of industries such as new energy, Siasun Robot & Automation, and semiconductors, the demand for antimony continues to rise. In particular, the growth in computing power brought about by artificial intelligence has driven the demand for antimony compounds in the high-performance chip and semiconductor industries. At the same time, the contraction in the supply side has intensified the upward trend in antimony prices. Global antimony production has been on the decline since 2011, dropping from 178,000 tons/year to 100,000 tons/year in 2024. China is a major producer in the antimony industry, with reserves and production of antimony mines ranking first globally. Antimony ore resources in China are mainly distributed in Hunan and Guangxi, with Hunan Gold Corporation, Xianxing Antimony, Tibet Huayu Mining, and Huaxi Group as the four main antimony suppliers. Due to previous over-exploitation, the decline in ore grade, and rising mining costs due to environmental factors, antimony production is unlikely to increase in the future. Tibet Huayu Mining stated that the company's main source of antimony products comes from the domestic Zaxikang mine and the Tajikistan Takin mine, with domestic antimony reserves totaling 190,000 tons and foreign antimony reserves totaling 260,000 tons as of the end of June 2024. For the full year 2024, the company is expected to achieve a net profit attributable to shareholders of 275 million to 335 million yuan, a year-on-year increase of 272.19% to 353.39%. Hunan Gold Corporation stated that the company has a smelting capacity of 25,000 tons/year of refined antimony and a production line of 40,000 tons/year of antimony products, but full production is difficult. In 2023, the company's total antimony product output was 31,000 tons, with 16,000 to 20,000 tons from their own mines and the rest relying on external purchases, limiting overall gross profit margins. In terms of exports, due to antimony being subject to dual-use material checks, the process is more complex than before, leading to a decrease in export volume, but there are signs of recovery in the near future. Additionally, the supply of other major antimony-producing countries such as Myanmar and Russia is also limited due to policy and geopolitical factors, leading to a tight market supply. Recently, Russian mining giant Polymetal reported a 53% cliff-like drop in antimony production to 12,700 tons in 2024, with a 70% year-on-year drop in production in the second half of the year, mainly due to the depletion of rich antimony ore resources and inventory consumption, indicating that the polar antimony supply may be absent in 2025 due to the exhaustion of rich deposits. 03 Global supply-demand imbalance intensifies price increase The antimony supply chain is not only influenced by domestic policies but also impacted by international factors. In recent years, the European and American markets have increasingly emphasized the supply chain security of key metals, and due to the strategic importance of antimony in industries such as military and electronics, it has been included in the "critical minerals" list, with the U.S. even planning to rebuild its domestic supply chain to reduce dependence on China. On August 15, 2024, the Ministry of Commerce and the General Administration of Customs announced export controls on items such as antimony, including antimony ore and raw materials, antimony metal and products, antimony oxide with a purity of 99.99% or higher, and antimony refining and separation technologies in 2024. On December 3, 2024, the Ministry of Commerce announced that it would not permit the export of two-use items related to gallium, germanium, antimony, and superhard materials to the United States in principle. As a result, the price difference between domestic and foreign antimony soared rapidly. On September 2, 2024, the former British Metal Bulletin quoted antimony ingots at $25,000 to $26,000 per ton, converted according to an exchange rate of 7.3 (USD/RMB), at which time the offshore price was 186,000 yuan/ton, while the onshore price was 157,000 to 160,000 yuan/ton, resulting in a price difference of 28,000 yuan/ton. As of March 3, offshore prices were...The price is 37.23 yuan/ton, with the domestic offer at 160,000 to 161,000 yuan/ton, and the price difference between domestic and overseas markets has significantly expanded to 211,000 yuan/ton.The impact of the widening price difference between domestic and foreign markets has led to a sharp decline in domestic antimony imports. Since September 2024, China's antimony ore imports have rapidly dropped, with only 466 metric tons imported in December (compared to an average of 1437 tons from January to August). The total antimony imports also dropped to 770 tons in December (compared to an average of 1989 tons from January to August). However, due to the highly concentrated global antimony ore resources, it is difficult to rapidly increase supply in the short term, leading to market concerns about future supply. Some downstream companies have even started hoarding goods in advance, further driving up the price of antimony. This trend is not limited to antimony, as other minor metals such as indium, gallium, lithium, etc., have also seen price surges due to global supply shortages. For example, the price of indium, an important material for manufacturing LCD screens and photovoltaic cells, has risen by nearly 30% this year. Refined bismuth has increased by 84% in the past year. Bismuth resources are mainly associated with tungsten, lead-zinc ore, and independent ore deposits are scarce, with some limitations on capacity expansion. At the same time, export control policies have limited overseas procurement, and hoarding behavior by traders will reduce the amount of bismuth available in the market, exacerbating the short-term supply tightness. In emerging fields such as defense and nuclear energy, demand for bismuth is growing, and the short-term demand is not significantly suppressed by price increases. China is the world's largest producer and exporter of bismuth, and the implementation of export control policies may limit bismuth exports, leading to a possible reduction in export volume. The global trade pattern of bismuth will change, with overseas market supply mainly dependent on existing stocks and supply from a few other producing countries. Are the minor metals in a bull market? From the price trends of minor metals such as antimony, indium, gallium, etc., the market is currently in an upward cycle. But does this mean that the overall minor metal market is entering a bull market? It still needs to be considered in conjunction with supply and demand relationships, policy support, and market sentiment. On the one hand, the continued development of new energy, semiconductor, and other industries has brought long-term demand support for special metals, making minor metals have a long-term bullish logic. On the other hand, some minor metals such as rare earths, cobalt, nickel, etc., are still subject to cyclical fluctuations, and whether the short-term uptrend can continue needs further observation. According to the Ministry of Commerce website, the world's largest cobalt producer, the Democratic Republic of the Congo, recently announced a four-month suspension of cobalt exports to curb the continuous decline in the international market price caused by oversupply of cobalt metal. From the demand side, cobalt prices are also supported. Industry insiders believe that the traditional peak consumption season for new energy vehicles is approaching, with production and sales data expected to show growth trends, downstream cathode material factories gradually resuming production, supporting cobalt market demand. Additionally, March is traditionally a peak season, and it is widely believed that under the support of better-than-expected resilience in domestic metal consumption, increased demand from the new energy industry chain, and the recovery of the manufacturing industry, industrial metal prices are expected to maintain a strong trend.