Like nearly all commodities, the price of antimony fell substantially in the last quarter of 2008. Average antimony metal prices fell by 38%. Prices rebounded slightly over the first half of the first quarter as we headed into the Chinese New Year holiday. This is an annual uptick in pricing due to reduced availability of material as manufacturing operations shutdown for the celebration. However, now that plants are coming back online after the holiday, availability and supply are returning to normal so prices have leveled off. Prices have stabilized at a level that is between 2008’s high occurring in September and 2008’s low in December.
It looks as though Chinese manufacturers are restricting exports in an effort to keep inventories, especially in European warehouses, to a minimum. Current equilibrium conditions should hold prices steady or possibly somewhat lower throughout the second quarter of ’09. Of course, this is predicated on the assumption nothing disrupts this equilibrium. A mine closure or similar event could cause prices to increase by 8% or 9%.
The lower metal prices of over the past two quarters is due mostly to a global manufacturing slowdown. There are hopes that the economic stimulus package recently passed by the United States congress will get manufacturing sectors to start producing again. If the stimulus is as effective as is hoped, demand for antimony metal and its derivative products will increase. A price increase of 5% based on increased demand is reasonable. However, from our perch on top of the supply chain, we believe that manufacturing activities will not increase before the third or fourth quarter of 2009.