Executive Interviews

Asian Metal: Hello, Mr. Li, welcome to Asian Metal's interview. Please make a brief introduction to your company.

Mr. Li: With a history of 127 years, Hsikwangshan Twinkling Star Co., Ltd. is a comprehensive company integrating mining, ore-dressing, metallurgy and R&D of antimony. Located in Xikuangshan, the "Capital of Antimony" in the World, the company is considered as the cradle of the antimony industry in China with the world's largest antimony mine. It is not only the largest producer and supplier of antimony products worldwide, but also a major R&D and export base for antimony products in China. It has two antimony mines and two antimony smelting plants, with total annual production capacities of 20,000t of antimony ingot, 40,000t of antimony products and 3t of gold. Owning a national level enterprise technology center, a nationally recognized laboratory and other technology platforms, the company has been rated as one of the "Top 10 Enterprises with Independent Innovation Ability in the National Industry", "High-tech Enterprise in Hunan Province", "Industrialization Demonstration Base of National Heavy Metal Pollution Prevention and Control Technology Research Center", and "National Green Mines". In 2020, the company was listed as a pilot enterprise for green development reform in mining transformation in Hunan Province. It owns 102 patents with independent intellectual property rights and has won 83 national and provincial-level scientific and technological achievement awards. As a main drafting unit for national standards related to the antimony industry, the company has been responsible for drafting 52 national and industry standards related to antimony, as well as 6 local and association standards. The Twinkling Star brand of antimony ingot produced by the company was selected as a "National Green Design Product". The lead removal agent, rapid arsenic-and-selenium removal technology, oxygen-rich smelting, and harmless treatment technology of arsenic alkali residue independently invented by the company have achieved a technological revolution in antimony smelting, leading the upgrading and development of the antimony industry. The company produces more than 20 products such as antimony ingot, antimony trioxide, dust-free antimony trioxide, ethylene glycol antimony, flame-retardant masterbatch and gold and exports these products to over 50 countries and regions in the world including Japan, Europe and America. By virtue of these products, the company has won more than 10 national honors, including "China Famous Brand Product", "China Famous Trademark", "Export Products Exempt from Inspection", "China Quality Integrity AAA Enterprise", "China Export Quality and Safety Demonstration Enterprise" and "National Green Mine".

Asian Metal: In recent years, China's antimony resources have been in short supply. Could you please briefly analyze the current supply and distribution status of domestic antimony resources?

Mr. Li: We can analyze this problem from two aspects. On the one hand, we can analyze from the changes of domestic antimony resources supply, and on the other hand, we can analyze from the current status of domestic antimony resources geographical distribution. In terms of domestic antimony resource supply, Chinese antimony resource supply has been in a state of reduced production. The peak period of antimony resources occurred from the 1990s to 2003, while currently domestic antimony resource supply has decreased by 30% and China's large-scale antimony mines are experiencing a decline in output and grade. From the perspective of current antimony resources geographical distribution in China, domestic antimony resources are mainly concentrated in Hunan Province. However, with the increase in demand and the prices of antimony products at a high level, antimony-containing materials in other provinces such as Guangxi and Guizhou have been developed accordingly. Therefore, the supply of antimony-containing materials from lead plants in Guangxi, Henan and Chenzhou gradually increased, but this part of raw materials is not enough to have an impact on high-grade antimony raw materials. Generally speaking, firstly, the quantity appears small, and secondly, the quality is relatively low.

Asian Metal: Prices for antimony products have stayed high for a long time mainly due to low inventory. What do you think of current production, supply and inventory situation in the antimony trioxide market?

Mr. Li: As far as I know, the inventory rate of domestic antimony trioxide plants is generally low at present and the overall inventory is limited. According to statistics, the total inventory held by domestic antimony trioxide plants is no more than 3,000 tons at present. Our company barely held any antimony trioxide inventory in Q3 and Q4 2023. However, we normally would hold at least 2,000-3,000 tons before, with peak level at 5,000 tons. We now keep inventory at a low level. On the one hand, it is due to our business philosophy as we won't retain too much inventory under the background of high prices; on the other hand, the task indicator of "increasing the proportion of collections and reducing inventory backlog" of state-owned enterprises avoids the financial risks caused by excessive accounts receivable and inventory occupation and controls availably the two fund occupations within a reasonable and appropriate range.

Asian Metal: How do you view the market demand and price trend in the first quarter of 2024?

Mr. Li: Based on the current situation in China, in terms of demand, end users are preparing stocks in advance at the end of the year, so the periodical demand would increase accordingly. From the perspective of supply, the production of mines would decline during the traditional holiday every year, and most mines in northern China would stop production in winter and have a rest for 3-4 months due to the special climate. During the Spring Festival holiday, mines in other places of China and our mines would also enter a production reduction period of nearly a month. In terms of smelting, both state-owned and private enterprises in China would stop production for maintenance before and after the Spring Festival holiday, resulting in a decrease in antimony products supply at the end of the year. Therefore, in the case of increasing demand and decreasing supply, social inventory would be further consumed, and I reckon that the overall price would rise steadily in the first quarter of 2024.

Asian Metal: Against the backdrop of great challenges in the development of the market economy, what are the most important factors that support the high price of antimony products?

Mr. Li: I believe that during the turbulent period of various economic environment changes in 2023, the main factors supporting high antimony prices are as follows: firstly, the application scenarios of antimony become wider, which further enhanced the application value of antimony. In recent years, the biggest growth point in the application field is in the photovoltaic field, and the increase in the demand from PV industry disrupted the supply-demand balance, not only consuming historical inventory, but even leading to short supply. Secondly, with the rapid development of the Chinese economy, the demand for antimony resources in China would further increase. At the same time, with the development of other economies such as Vietnam and India, the demand for antimony would grow further. Thirdly, with the decrease in the supply of antimony resources both domestically and internationally in recent years, the overall operating rate of Chinese antimony companies keeps at a low level, which is also a main reason for the high price of antimony.

Asian Metal: The antimony market supply is in deficit now, so what should we do to keep balance between antimony recovering and environmental protection in the current smelting process?

Mr. Li: Definitely, the domestic antimony supply shows a tight trend, and we think all the companies in the industry should recover antimony resource further and increase their recovery rates, because antimony is not like copper, aluminum, lead and zinc and other metals that are recyclable. Therefore, we'd like to see that other companies increase their recovery rates of antimony resource subject to environmental protection. As for how to increase the recovering rate, the first point we can not ignore is that we must recover the metal in a way not against the national "double-carbon" environmental protection policies. And, improving technologies to optimize the quality of recovered antimony is the second aspect we should focus on. Because muti-metal recovering process asks highly of costs controlling, while the main costs come from technology bottlenecks rather than raw materials. What's more, the quality requirements on recovered antimony differ in end products and the impurity content doesn't meet the international standards, so the current recovered antimony can't be applied to high-end fields. However, in order to keep in line with the current national environmental protection guidance and maintain long-term social benefits, we call on the introduction of new national standards on the comprehensive recycled products to achieve product compliance truly.

Asian Metal: Have you made any plans on further diversifying your antimony products? Do you consider extending your industrial chain?

Mr. Li: This month, we held a meeting on the research and development of antimony materials with professors from Peking University, Zhejiang University and Central South University as well as industry experts, and we reached agreement on a "university-enterprise cooperation" mode where university experts lead research on antimony materials and our company provides technical and material supports, as we are committed to further study the application of antimony materials in order to expand the application scenarios of antimony resources. We also set up the Antimony Research Branch of Minmetals Group, where we can have regular meetings to exchange and share thoughts on the application and development of antimony resources. In terms of high-end products, we have realized a diversified development relying on high-quality antimony resources and strong technical background. We now hold an 80% market share of catalytic grade antimony trioxide in China, with our global market share exceeding 70%. We have basically met the demand from most customer groups. In 2023, our company successfully developed 4N and 5N high-purity antimony metal which have been sold on the market since then, and we will continue to strength research and development of high-purity antimony metal in the future. Given the high quality of our own antimony resources, we currently have no plan to expand into the sodium antimonate market.

Asian Metal: How do you view the rising demand for antimony from PV market?

Mr. Li: The PV market has been growing rapidly in China supported by national policies, and the demand for sodium pyroantimonate increased significantly, which is one of the reasons for increased prices of antimony products. However, the surging demand from PV industry and the consequential antimony price hike indeed require higher ability to bear costs for the traditional downstream industries of antimony, and the application of antimony in the traditional industries is also restrained to some extent.

Asian Metal: Thanks again for your wonderful sharing, and we wish your company a prosperous business.