United States Antimony Corp (UAMY)

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Antimony sprints to $6,000/t, highest since late-1994 on China supply worries
By Martin Hayes - Senior Correspondent, [e-mail] ([phone])

London, 07 February 2008 - Antimony prices continued to strengthen in Europe this week, underpinned by concerns that the current lack of Chinese metal availability will get worse, as severe winter weather is not only hampering production, it is preventing transportation of metal as well.

"The situation looks bleak in China -- they are not offering. And anyone who has metal on the ground in Rotterdam can ask crazy numbers now," a trader said.

Spot metal was quoted at $5,900/6,100 a tonne, up around $150 since last week and the highest since late-1994. Good grades were even higher -- business has been reported as high as $6,350 a tonne.

"We are hungry for deliveries from China, but they are on holiday now (Lunar New Year)," another trader said.

Weather-related production stoppages in China -- caused by the worst winter weather for 50 years -- are behind current gains. The country is the world's biggest supplier and China's largest antimony producer, Hsikwangshan Twinkling Star Co in Hunan, has been hit.

There will also be shipment delays in the wake of the Lunar New year holiday and some contracted metal may not arrive until late-March/early April. This has forced a scramble for metal by many end-users in Europe, who up to now have been able to adopt a relaxed hand-to-mouth buying policy. The metal, mainly used in fire-retardents, has been ranging around the mid-$5,500s for some months.

China accounts for over 80 percent of global output. In 2007, it produced 110,000 tonnes out of total global production of 135,000 tonnes.

In 1994, antimony metal prices surged strongly, amid shipment delays from China in early spring caused by extensive flooding in major antimony mines and smelters. Production and shipping delays persisted most of the year. with prices hitting levels in the $7,700/8,000 area, before the market tailed back in 1995.

Whether prices reach those heights again depends on the response from China once the current weather improves. There will be logistical delays, but Chinese traders do control stocks in Rotterdam.

"It depends -- they may want to sell into this. In which case it may not go much further than $6,000 or so," the first trader said.
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