Suppliers reluctant to sell antimony products makes price rise sharply with market close to be out

BEIJING (Asian Metal) 21 Jul 09 - Antimony ingot plants are reluctant to sell due to the tight supply and the good expectation towards the future market, which makes price rise further though with few deals concluded. Some plants offer around RMB38,000-39,000/t (USD5,563-5,710/t) to depress buyers from buying.
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Shortage of antimony concentrate supply pushes the producers to raise offers. As the government restricts nation's exploitation of antimony concentrate, and strengthened supervision and control over denudation, many antimony ingot plants are faced with the problem of insufficient supply of antimony concentrate, together with decreasing high quality antimony ore due to continuously exploitation for many years.
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Antimony ingot plants all increase offers due to tight supply, and antimony concentrate suppliers further raise offers seeing antimony ingot price up, which causes antimony ingot producers to rush to buy, and thus the price of antimony ingot and antimony ore goes up by turns. As the situation fluctuates rapidly, most antimony producers do not dare to purchase antimony concentrate for fear of price decreasing in the near term. Meanwhile many plants limit output, which further results in higher prices.
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A producer in Hunan are worried about the current situation. "Most plants still have some inventories. On one hand, people hope the price to rise further for more profits, On the other hand, as they do not dare to replenish stocks at current high prices, they are reluctant to release any stocks on hand," said the source. However, the source are worried that buyers may not purchase materials when price goes up to a certain level, and dealers, especially traders may lower offers for deals, which may cause producers to close out.
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The factories produce around more than 100t of antimony ingot every month, and their latest deal was made at the end of June at around ex-works RMB31,500/t (USD4,612/t). The source has not sold any materials since July till now after signing this long-term contracts, and now has a monthly trading volume of less than around 50-60t. "We did not offer in the past week as most local plants, and we do not know how to decide an offer," said the source. However, the source claimed that they will not sell at below ex-works RMB37000/t (USD5,417/t).
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Affected by the rapid increase of antimony price, antimony trioxide producers are forced to increase offers. According to the current situation, some plants have increased antimony trioxide offers to around ex-works RMB33000-34000/t (USD4,832-4,978/t), RMB3000-4000/t (USD439-586/t) higher than the offer last week, which the consumers can not accept. Some antimony trioxide producers have to halt production under such a bad situation.
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The sharply rising price of antimony ingot and antimony trioxide in domestic market makes antimony export market fall stagnant. Some foreign buyers bid around USD5500/kg and USD4900/kg but still can hardly purchase any material. It is now difficult to find enough supply and they halt export to avoid risking. Therefore it is estimated that this may result in tightening supply and increase the price in international market.