China is stepping up its game when it concerns export restrictions, particularly on antimony products starting September 15. This move is mainly fueled by national security concerns and has led to heightened anxieties among global markets reliant on this critical mineral.
Antimony, classified as a shiny grey metalloid, has applications stretching back to ancient times, particularly known for its use in medicine and cosmetics. Nowadays, it finds most of its use as a flame retardant, accounting for roughly half of its global consumption.
Another significant application is its role in photovoltaic glass used to boost solar cell performance, making it increasingly strategic amid the rising demand for clean energy technologies. A substantial portion of antimony is also instrumental for lead-acid batteries, military equipment, and various electronic devices.
The primary ore for mining antimony is stibnite, which consists of antimony and sulfur. It can also be recovered as a byproduct from gold mining or through the recycling of lead-acid batteries, underscoring its versatility.
This latest round of restrictions from China encompasses antimony products, including ore, ingots, and oxide. Exporters are now required to obtain licenses for items considered dual-use, which means they could be utilized for both military and civilian applications—a process typically lengthy and cumbersome.
While these restrictions don’t directly cap the volume of exports, historical data indicates significant drops following similar curbs on other minerals like gallium and germanium. Companies faced challenges securing export licenses, leading to decreased shipments.
Currently, China holds the title as the largest producer of antimony, dominating the market with nearly half of the global mine production. According to the U.S. Geological Survey, Tajikistan trails behind, managing only about 25% of production.
Within China, the lion's share of antimony reserves is concentrated mainly in the provinces of Guangxi, Hunan, and Gansu. Not only does China produce most antimony ore, but it also leads the way as the world's largest processor of antimony products.
The increasing demand for antimony, particularly from the solar energy sector and military applications, sharply contrasts with stable production numbers. For example, China’s own production of unwrought antimony has dropped significantly, with exports plummeting by 45% year-on-year during early 2024, leaving European refineries and other global markets scrambling for alternatives.
This scramble has forced European ATO refiners to look toward other countries, including Tajikistan, Vietnam, and Myanmar, as they seek to replace the dwindling supply from China. American buyers have mostly turned to India, which highlights the shifting dynamics within the global market due to China's new restrictions.
Despite this, analysts warn the global supply of antimony may not easily meet the rising demands. U.S. geopolitical tensions and production constraints have added another layer of complexity, exemplified by Russia's reduced contributions to Chinese imports due to declining production heights.
Christopher Ecclestone, from Hallgarten & Company, noted the fragile supply pipeline for Antimony, stating, "There is no pipeline of supply to turn on." With approximately 70% of global ATO production coming from China, many countries face critical barriers to accessing the metal.
The shortfall of antimony is quite alarming, especially when it was estimated to hit around 10,000 tons as of May. China's export restrictions are set to exacerbate these deficits, stirring more urgency within global markets to secure these strategic materials.
Meanwhile, as these developments take shape, antimony prices have already soared to unprecedented highs. The price for Chinese antimony traded at around $22,000 per metric ton at the end of July, marking the highest recorded rates to date.
Speculators expect prices to spike even higher, with projections reaching up to $30,000 per ton as overseas buyers rush to amass more stock before the restrictions tighten the supply even more. Chinese producers have even seen their share prices rise sharply, with some jumping as high as 10% after the announcement.
Interestingly, companies outside of China are also considering boosting domestic resources or production capabilities to counter the reliance on imports. For example, Perpetua Resources, with plans to kickstart its U.S. antimony and gold project, is reassessing its timeline and exploring faster production methods.
The urgency to pivot from reliance on China is palpable, particularly amid mounting geopolitical tensions and heightened demand for military uses and renewable energy applications from the solar sector. Already, companies are attempting to act swiftly to position themselves within this shifting market space.
Might this be the moment for countries like the U.S. to truly diversify their supply chains? The risks of dependence on one nation for such critical resources are becoming starkly evident as global players re-evaluate their strategies.