FOCUS: Fanya auctions give momentum to minor metals prices after years of overhang

Questions about the fate of stocks held by the defunct Fanya Metal Exchange have been a weight on negotiations in many minor metals markets since the bourse collapsed in 2015, and have contributed to the uncertainty that has stifled trade for much of 2019.

Buying appetite in the spot market has weakened, and prices for some minor metals including indium, bismuth and antimony have reached multi-year lows amid hesitant trade and fears over the release of stocks from Fanya.
But the two latest auctions – for tungsten and antimony – have shown that the overhang of Fanya stocks could prove a bigger burden on trading and prices than the release of material itself.
“Fanya is a done deal now, and once that is out of the way the overhang will start to ease," a tungsten trader in Europe said.
Tungsten auction finds intense competition
On Tuesday September 17, China Molybdenum won the auction for the 28,336 tonnes of ammonium paratungstate (APT) – equivalent to around three months of Chinese output – that had been held by Fanya. The sale has given relief to the market, and some sources have suggested it could be enough to boost prices and improve the sentiment once market activity returns.
The winning $463-million bid followed 135 rounds of bidding, according to official auction results posted on the Alibaba judicial online platform. China Molybdenum’s final bid was 820 million yuan higher than the opening amount.
Fastmarkets assessed the price for tungsten APT 88.5% WO3 min Europe, cif Rotterdam duty-free at $195-205 per mtu on Friday September 20, unchanged since August 23 at its lowest level since February 2017.
The tungsten market has been under pressure since the beginning of the year, in part due to slow consumer buying stemming from the Fanya overhang, with buyers waiting to see who would buy the stock and at what price. But, over the past few weeks, prices have stabilized and even risen in the Chinese domestic market in anticipation of the successful auction and subsequent tightening concentrates supply in China.
“Fanya stocks aside, the rest of the market is tight; stocks are really low,” a second trader in Europe said.
“Customers in Europe will need to buy APT soon,” a third trader said. “When Fanya is out of the way, buyers will come back.”
Antimony prices gather momentum after auction
In the antimony market, too, the auction of Fanya stocks boosted sentiment by providing clarity on the availability and status of material.
Prices found support immediately after China Minmetals won the auction for all of Fanya’s antimony stock – 18,661 tonnes – at the end of August. The final price was $76.28 million, much lower than prevailing spot market prices at the time.
In Europe, Fastmarkets assessed the price of antimony, MMTA standard grade II, in-whs Rotterdam, at $5,800-6,085 per tonne on Wednesday September 18, up by 1.6% from $5,700-6,000 per tonne on September 13, with producers raising their offers on improved sentiment amid restocking. That price widened upward on September 20, to $5,800-6,100 per tonne.
The auction came in a moment in which buyers were expected to restock materials and boost prices in the process. At the time of the auction, on August 31, antimony, MMTA standard grade II, in-whs Rotterdam, stood at $5,700-5,950 per tonne.

Charlotte Radford

charlotte.radford@fastmarkets.com

Cristina Belda

cristina.belda@fastmarkets.com

Published

Charlotte Radford

Cristina Belda

September 20, 2019

19:49 GMT

London