European bismuth prices jump as China traders opt to sell on local exchange

Bismuth prices in Europe have surged to nine-year highs as tight supplies are exacerbated by traders in top producer China selling on a local exchange instead of exporting the metal used to make medicines.

Prices of bismuth (BIS-LON), also used in solder, alloys, metallurgical additives and atomic research, are currently around $7 per pound on the European spot market, the highest levels since 2015 and up more than 75% since early May.

Chinese traders attributed the rally to tighter bismuth supplies from lead and zinc refiners amid increasingly stringent environmental inspections. Bismuth is mostly produced as a byproduct of battery metal lead.

"Europeans also point to speculation on the Zhonglianjin metals trading platform as a key driver," said Sian Morris, non-ferrous metals analyst at Argus.

China's Zhonglianjin platform, also known as Wuxi Stainless Steel Exchange, launched a physically deliverable futures bismuth contract in May 2023.

"Chinese traders find it more profitable to sell on the exchange than incur the costs of exporting and with China being an important player, there is a supply shortness," said a European minor metals trader.

China's bismuth exports in July fell 26.1% from the previous month to 1,053 metric tons, customs data showed.

A Chinese trader said shipping bismuth was time-consuming and cumbersome, and there was a month-long lag between shipping and being paid.

Global bismuth production last year amounted to 20,000 tons, with 80% of that coming from China, according to data from the U.S. Geological Survey.

The most-traded bismuth contract on the Wuxi exchange was trading at 96,800 yuan ($13,590.92) a ton on Aug. 27 after hitting 139,900 yuan a ton on June 21, the highest since the contract was launched.

"The inflow of speculative funds also increased the volatility in the market," Li Chengchen, an analyst at the Rare Metals Branch of China Nonferrous Metals Industry Association, wrote in a recent research note.

($1 = 7.1224 Chinese yuan renminbi)