Huaxi: China leads global 80% bismuth supply, implementing export control to support rising bismuth prices.

Huaxi released a research report stating that changes in China's bismuth industry have a significant impact on global prices. The bismuth export control policy that will be implemented starting February 4, 2025, supports the rise in bismuth prices. Over the past 25 years, China's bismuth production has accounted for about 80% of global production, and factors such as China's bismuth production, export trade policies, environmental inspections, and capital speculation all influence global bismuth prices. Currently, due to the widening price difference between domestic and international bismuth prices and the continuous rise in bismuth prices on the Wuxi electronic disk, domestic spot prices have risen from 9-9.4 million yuan per ton on February 28 to 9.8-15 million yuan per ton on March 7. Recommended stocks to watch include China Tungsten and Hightech Materials (000657.SZ), Henan Yuguang Gold & Lead (600531.SH), Beijing GeoEnviron Engineering & Technology, Inc. (603588.SH), Dongjiang Environmental (002672.SZ), Zhuzhou Smelter Group (600961.SH), and Yunnan Chihong Zinc&Germanium (600497.SH). Key points from Huaxi are as follows: Over the past ten years, the global supply of refined bismuth has not seen significant increases. Since 2011, China's annual bismuth production has generally been between 15,000 and 16,000 tons, accounting for about 80% of global production. Bismuth is rarely mined in sufficient quantities as a primary product, usually being produced as a by-product in the processing of lead, tungsten, and zinc ores. According to USGS data, global refined bismuth production was 20,000 tons in 2023, with China producing 16,000 tons, accounting for 80% of global production. South Korea and Laos produced 850 tons and 2000 tons in 2023, accounting for 4.25% and 10% respectively. Since 2011, China's annual bismuth production has generally been between 15,000 and 16,000 tons, accounting for about 80% of global production. Bismuth has a wide range of applications, with the United States completely dependent on imports for its primary bismuth supply. In terms of market demand, bismuth has a wide range of applications, including pharmaceuticals, metallurgy, pigments, cosmetics, electronics, semiconductors, solar panels, and other industries. According to China Mining News, global bismuth consumption totaled 15,340 tons in 2022, with Europe accounting for 6,000 tons (39%), China for 4,760 tons (31%), the United States for 2,100 tons (14%), and Japan for 730 tons (5%). In 2022, 67% of bismuth consumption in the United States was used in cosmetics, industry, laboratories, pharmaceuticals, and other chemical applications, 8% was used in low-melting alloys and metallurgical additives, and 25% was used in other areas. From 2023 to 2024, bismuth consumption in the United States continuously decreased to 760 tons. Since 1997, the United States has been completely dependent on imported primary bismuth, with approximately 80 tons of bismuth produced annually in recent years from secondary recycling. Changes in China's bismuth industry have a significant impact on global prices. The bismuth export control policy that will be implemented starting February 4, 2025, supports the rise in bismuth prices due to the fact that China's bismuth production has accounted for about 80% of global production over the past 25 years. Factors such as China's bismuth production, export trade policies, environmental inspections, and capital speculation all influence global bismuth prices. For example, in 2006, due to stricter environmental measures in domestic mines and the cancellation of bismuth export tax rebates, global bismuth prices rose rapidly; in 2013, speculation in the Pan-Asian non-ferrous metals exchange led to rapid fluctuations in bismuth prices. On February 4, 2025, the Chinese government announced that export controls would be imposed on five key minerals, including tungsten, tellurium, bismuth, molybdenum, and indium, with exporters in China requiring permits from the State Council for Commerce to export these minerals. Prices have since entered an upward trend. Since China announced export controls, refined bismuth prices in Europe have jumped from $6.39 per pound to $30-35 per pound, but there is a lack of market demand. It is a common phenomenon that there are significantly inflated prices overseas. Due to the widening price difference between domestic and international bismuth prices and the continuous rise in bismuth prices on the Wuxi electronic disk, domestic spot prices have risen from 9-9.4 million yuan per ton on February 28 to 9.8-15 million yuan per ton on March 7. Bismuth trioxide, as the main export product, has not been affected by export controls, and the social stock of bismuth is relatively considerable. The latest round of bismuth export restrictions expanded the list to include bismuth metal and three compounds, but not bismuth trioxide, which accounted for about 69% of exports in 2024. According to China Customs data, bismuth trioxide exports from China reached 8,500 tons in 2024, a significant increase of 32% compared to 2023. However, with the continuation of the trade friction between China and the United States caused by the tariff policies of the Trump administration, it is not ruled out that there may be future upgrades in export controls for bismuth products. According to data from the official WeChat account of Zhonglian Jin in March 6, 2025, the stockpile of bismuth in their warehouse reached 14,502 tons, almost equivalent to China's annual production. On November 23, 2019, the Pan-Asian auction involving 19,228.05 tons of bismuth concluded, with a total transaction price of approximately 606 million, and a transaction price of approximately 31,520 yuan per ton. According to data from the Observing Research Report website, global refined bismuth production from 2021 to 2023 has consistently exceeded bismuth consumption, with a cumulative excess production of 13,300 tons over the three years. Overall, the accumulation of refined bismuth and its products in social stocks should be considerable. Beneficiary targets include: 1) China Tungsten and Hightech Materials (000657.SZ): The company's acquisition of Shibazhu Bismuth concentrate has an annual production capacity of about 1,500 tons; 2) Henan Yuguang Gold & Lead (600531.SH): Refined bismuth production in 2023 was 1,675 tons; 3) Beijing GeoEnviron Engineering & TechnoLogy, Inc. (603588.SH): In 2023, the company produced 3548 tons of refined bismuth and sold nearly 3978 tons of refined bismuth. 4) Dongjiang Environmental (002672.SZ): Subsidiary Chenzhou Xiongfeng Environmental Protection Technology Co., Ltd. produced 1500 tons of recycled refined bismuth in 2023.5) Zhuzhou Smelter Group (600961.SH): The lead smelting system mainly produces lead and alloy products, and comprehensively recovers valuable metals such as zinc, copper, gold, silver, antimony, bismuth, tellurium, and palladium in the production process; 6) Yunnan Chihong Zinc&Germanium (600497.SH): The company's main business is zinc, lead, and germanium, with comprehensive recovery of precious metals such as gold, silver, cadmium, bismuth, and antimony; 7) Shanghai Wanye Enterprises (600641.SH): The company announced on January 17, 2025 that it plans to carry out bismuth metal deep processing and compound product business through its wholly-owned subsidiary, Anhui Wandao Electronic Technology Co., Ltd. Risk warning 1) Bismuth production increases exceed expectations; 2) Bismuth continues to accumulate large inventories; 3) The downstream demand for bismuth grows slower than expected; 4) Changes in China's export control policies exceed expectations; 5) Other macroeconomic changes.