www.antaike.com

Foreword Q2 is the traditional high season

for stainless steel consumption. But

the demand did not improve as

usual. The falling LME nickel price

weakened the market confidence.

Steel plants became more cautious

to buy raw material. The

ferrochrome production cost rose in

South Africa in Q2. Then chromium

price also increased. But all factors

could not hold back the negative

affect brought by falling nickel price.

As a result, steel makers in Europe

and America lowered alloy

surcharges, and Asian steel makers

cut ex-factory price. Chinese

domestic stainless steel producers

started production cutback to

cushion the weak price.

This issue was dispatched on May 18, 2012

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Beijing Antaike Information Development Co., Ltd.

Editor: Albert Hu

Sales Manager: Shiela Ju (Ms.)

E-mail: cmm@antaike.com,

hubei@antaike.com

INSIDE THIS ISSUE

Foreword Stainless Steel…………………………….………....…….1

Nickel………………………..….……….……………….….5

Ferrochrome……………………………………………….10

Tungsten……………………….…………..……….…..….16

Cobalt………………………….…….…….…………….…21

Molybdenum…………………………..….………………..26

The Most Essential and Authoritative Source for Chinese Metals Market

Stainless Steel & Raw Materials May 2012

SSRM201205

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Stainless Steel

Price continue to

decline in April

NiCr stainless steel price had been falling in April. The waving range

was between 100-200 yuan/t. The spot price even dropped to the low

level ever since June 2009. The 400 series price was relatively stable.

The price of 304 2mm/2b on Wuxi market waved between

18,600-18,800 yuan/t in April. Tisco lifted the hot rolled product price in

order to spur transaction of cold rolled product in April. Soon Tisco

announced to lower its May ex-factory price. The price of 304/2b cold

rolled coil is quoted at 20,000 yuan/t; the price of 304 12mm hot rolled

coil is 19,800 yuan/t; the price of 430 2mm/2b cold rolled coil is 10,850

yuan/t.

Tisco raised 400 series production in April while lowering 300 series

production. As a result, the stockpile of 400 series products on market

increased rapidly. In addition, orders have not resumed in April though

it is already the traditional high season for consumption. End users

became more cautious to do transaction. Then Tisco decided to

reduce 60-70% of 304 cold rolled coil supply in May. The stainless

steel stockpile in 26 main warehouses in Wuxi market was 210.7kt in

the middle of April, slightly down compared with March.

Stainless Steel Prices on Wuxi Market in 2011-2012, yuan/t

Chinese stainless

steel output inches

up in Q1 2012

China produced 2.65 million tonnes of crude stainless steel in Q1

2012, up by 2.7% compared with Q4 last year. The 300 series output

was 1.85mlnt, accounting for 50.6% of the total output; 200 series

SSRM201205

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output was 986kt and 400 series output was 820kt. The total

production of Chinese five leading stainless steel producers was 2.1

million tonnes, including Tisco, Baosteel, Jisco, ZPSS and Lisco.

Some domestic steel makers started to lower production in February

this year on low demand. Tsingshan Group cut 30kt of 300 series

output in April; Southwest Stainless Steel curtailed production by 20%

in March, equal to around 10kt; Baosteel also reduced 10kt production

in March; Lisco cut 60kt of output in April, including 10kt of 300 series

product. It is said steel makers will continue to lower production in May.

China sees SS

import and export

down in Q1

Chinese stainless steel import and export trade both declined in the

first quarter this year, according to Customs figures. The import was

193.4kt in Q1, down by 23.4% y/y, while expoet was 437.3kt, down by

15.1% y/y. In March, China imported 69.9kt of stainless steel products,

and exported 197.9kt. Hot rolled coil and cold rolled plate were the

major import products. South Korea was the major export destination

of China.

Chinese stainless steel import and export in 2011-2012

China keeps stable

apparent

consumption of SS

in Q1 2012 against

Q1 2011

Chinese apparent consumption of stainless steel was 2.86mt in Q1

this year, up by 0.7% y/y. China produced 3.65 million tonnes of crude

stainless steel in Q1 2012. The import was 193kt and the export was

437kt during the same period.

SSRM201205

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Apparent Consumption of Chinese Stainless Steel, kt

2010 Q1-11 Q2-11 Q3-11 Q4-11 2011 Q1-12 （%）

Output 12,350 3,660 3,600 3,640 3,560 14,460 3,655 -0.14

Import 1,072 252 246 216 222 936 193 -23.4

Including:

3-4.75mmHR

products

165.3 36.2 37.5 32.5 33 139.2 24.5 -32.3

Export 1,533 515 633 641 480 2269 437 -15.1

Apparent

Consumption 1,002 2,840 2,670 2,660 2,760 10,940 2,860 0.7

Outlook The continuous falling nickel price in May weakened the market

confidence. In addition, the weak economy data also increased the

concern to the market prospect. The end users became more cautious

to buy raw material for production, while the sellers were reluctant to

do transaction at low price. On the other hand, the ferrochrome price

increased on higher electricity cost of producers in South Africa. The

ferrochrome output is expected to drop 20% in 2012. According to

INSG report, nickel market will be over surplus in 2012 with

commissioning of new projects. The world nickel output is expected to

be 1.69mlnt in 2012, up by 5.6% y/y, while the consumption is

1.64mlnt, up by 4.5% y/y. Therefore, nickel market faces strong

pressure in price rebound. The stainless steel price will continue to

vibrate in narrow range.

In respect of the global demand, the auto production industry in

European market was not good this year. Thus the stainless steel

consumption there will shrink. China is still the major consumer in Asia.

The stainless steel demand was very weak in Italy, which dragged

down the whole market of Europe. The US market performed good. It

is forecasted Brazil market will improve this year.

SSRM201205

5

Nickel

Nickel Price LME nickel price vibrated down in April. At the same time, Chinese

domestic nickel price maintained stable relatively. In early April,

transaction was flat due to the holidays. The price gap between

Jinchuang nickel and Russian nickel product was enlarged to 1,500

yuan/t. Market participants considered nickel price owns strong support

at 130,000 yuan/t. A trader said transaction was better in April, and

Russian nickel sales were active. But the high season of consumption

is coming to an end, the demand is still a big concern.

Nickel Prices on LME and SHFE and Price Gap Between the

markets in 2011-2012

Source: Antaike

In April 2012, the highest nickel price on Shanghai Changjiang spot

market was 134,000 yuan/t and the lowest was 128,500 yuan/t. The

average price was RMB 131,121 yuan/t, down by 3.0% m/m.

JNMC's offer of nickel ex-factory price since March 2012:

Date Mar. 6 Mar. 14 Mar. 19 Mar. 23 Apr. 13 Apr. 19 Apr. 27

JNMC Nickel

Cathode (yuan/t)

135,000 138,000 135,000 132,000 134,000 130,000 133,000

LME Nickel (USD/t) 18,651 18,493 18,967 18,105 18,246 17,526 18,022

Sources: JNMC

SSRM201205

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Indonesia export

ban affects

domestic NPI

market

Indonesia government plans to impose 20% tax on raw material

resources exports. Antaike estimates Chinese NPI production in 2012

will be 10% less than earlier expectation. The 2013 NPI output may

drop by 20% compared with 2011 data. China produced 250kt of nickel

pig iron in 2011. The ore import was 48.2mlnt and 25.7mlnt was

imported from Indonesia. The 14 related commodities are copper, gold,

silver, tin, lead, chromium, molybdenum, platinum, bauxite, iron ore,

iron sand, nickel, manganese and antimony.

NPI prices lingered at low level in April. Medium and high grade NPI

prices edged down, while low grade NPI was relatively strong. The

market said many small NPI producers in Hebei province switched to

steel production. The operation rate in Shanxi province was also low.

Antaike understood Chinese NPI capacity utilization rate was around

60%. Many plants are having a big stockpile. In late April, domestic

major steel makers released NPI purchasing price: Tisco 1,340

yuan/mtu, Jisco 1,370 yuan/mtu, Lisco 1,340 yuan/mtu and ZPSS

1,330-1,350 yuan/mtu. The purchasing prices were adjusted down,

indicating steel plants were not looking good into May market.

Growth of Chinese

NPI production

slows down

LME nickel price fell by 5% in Q1 this year, which owns the largest fall

among base metals. However, the upstream ore traders were still trying

to raise ore prices. Stainless steel plants pressed down raw material

purchasing prices at the same time. It made NPI producers even hard

SSRM201205

7

to make profit. As a result, Chinese NPI production slowed down the

development pace. Chinese NPI output was nearly 69kt in Q1 2012, up

by 3% y/y. Low grade NPI production maintained stable during this

period, representing 15% of the total output.

Import and Export China imported 9.8mlnt of nickel ore in Q1 this year, down by 36%

against Q4 last year. China imported 3.67mlnt of nickel ore in March

this year, up by 73% y/y. 2.90mlnt was imported from Indonesia and

680kt was imported from Philippines. China also imported 50kt from

New Caledonia, which was the second straight month for China to

import ores from the county in recent 3 years.

The key factor for the falling ore import is the decreasing import

volume from Philippines. Chinese nickel ore import from Philippines

kept at around 2.0Mt each month in Q4 2011. But the monthly import

this year was merely 700kt. China has been importing more ores from

Indonesia. Ore traders had been trying to ship more resources back

China before Indonesia carries out the export ban. It is estimated that

most vessels were sent to Indonesia and import from Philippines

dropped.

Source: China Customs

SSRM201205

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Chinese Nickel Ore/Conc. Import by Origin in 2012, tonne

Country Jan. Feb. Mar.

Total 2,770,762 3,371,880 3,667,760

Indonesia 2,142,875 2,641,662 2,901,773

Philippines 596,024 654,246 682,415

Source: Customs

Nickel Ore Stock

Nickel ore with low nickel and high iron content was short in supply

due to Philippines government’s control. The price was raised up again.

Middle and high grade ore went down slightly. Downstream

consumption was weak. The ocean freight expenses rose, thus the ore

import cost increased. Affected by Indonesian export policy, the ore

import in 2012 was still huge, though slightly down. The stockpile at

ports was more than 1.60 million tonnes in late April.

Chinese nickel

apparent

consumption 161kt

in Q1 2012

Chinese nickel apparent consumption was 161kt in Q1 2012, up by

8.3% y/y. Refined nickel output was 41kt, up by 11.5% y/y. Nickel pig

iron output is estimated to be 69kt during the same period. The total

primary nickel output was 106kt in Q1 2012, up by 5.6% y/y.

China imported 39,253t of refined nickel in Q1, down by 16% y/y.

According to market data, there was 50-70kt of refined nickel stockpile

in boned warehouse. Chinese nickel import reduced in Q1 while export

was still large. At the same time, domestic nickel supply maintained

stable, indicating domestic demand shrank in Q1.

SSRM201205

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Chinese apparent consumption of nickel in 2011

Unit: tonne

2011 Jan 2012 Feb 2012 Mar 2012 Q1,2012

Output of Electrolytic Ni 182,750 13,861 13,818 13,650 41,329

Output of Jilin Ni Salts 9,000 750 750 750 2,250

Output of NPI 254,300 21,000 21,000 21,000 63,000

Output of Primary Nickel 446,050 35,611 35,568 35,400 106,579

Imports 277,666 22,992 22,621 22,800 68,413

Unwrought Nickel 199,065 12,736 12,107 14,000 38,843

Nickel Anode 1,692 105 141 140 386

Nickel Powder 3,888 374 294 300 968

Sintered Nickel Oxide (Physical

weight) 9,365 626 233 300 1,159

Sintered Nickel Oxide (Nickel

Content) 8,060 538 200 200 938

Intermediate in Hydrometallurgy

(Physical weight) 27,068 2,404 2,678 2,500 7,582

Intermediate in Hydrometallurgy

(Nickel Content) 24,361 2,067 2,303 2,150 6,520

NPI (Physical weight) 135,335 23,903 25,252 25,000 51,655

NPI (Nickel Content) 40,601 7,171 7,576 7,576 22,323

Apparent Supply 723,716 56,535 55,886 57,616 170,037

Exports 33,184 545 4,799 3,000 8,344

Apparent Consumption 690,532 55,990 51,087 54,616 161,694

Source: Antaike

Outlook The bulk commodity prices fell in April on slow economy growth of

USA, worse of European debt crisis. LME nickel price was even weaker

than other bulk commodity. Nickel market seemed to emerge a recover

sign in early April, but over supply was still a big pressure. The price

touched a high of USD 18,700/t and then declined below USD 18,000/t.

Many institute predicted the world nickel supply will be surplus in 2012,

which affected the price. However, some speculating funds will cushion

the price above USD 17,000/t. It is expected nickel price will rebound in

May, running at USD 17,050-18,600/t.

As more nickel project being developed in the future 3 years, the

SSRM201205

10

HPAL smelting technology will be crucial to lateritic nickel ore usage.

Some analysts said the price trend would be depending on the

development and utility rate of HPAL technology. It is predicted the

world stainless steel output will grow 11% in 2012. But the expected

46kt of surplus in 2013 will be a strong pressure to nickel price.

Ferrochrome

Ferrochrome

Market Stabilized

and Improved

The global high-carbon ferrochrome market performed better in April

than March this year, in March European and American markets showed

a tendency to rise but still in a lack of strength, however after one-month

adjustment, their tendency to rise showed again in April. The price of

American market already started to go up, but in Europe only the

quotations raised instead of price. Chinese ferrochrome market was

stabilized in April and the decrease in demand was the biggest resistance

for price to go up. The effect of South Africa’s reduction of output will

reflect in May and the inventory at China’s chromium ore storing ports

was continuing to decrease. It is predicted that the ferrochrome market

will turn better by the end of May.

Chromium Ore Price Expected to Rise

Price of chromium ore began to drop in the middle of April but by the

end of the month price lifted back to the same level as Early April. Price

showed a tendency to slide just when Taiyuan Iron & Steel (Group) Co.,

Ltd (TISCO) announced their new purchasing cycle of high carbon

ferrochrome in April. TISCO’s bidding price was finally surfaced on April

9th, and the price was 7,480 yuan/base tonne, down by 220 yuan/base

SSRM201205

11

tonne from the price 7700 yuan/base tonne in March. Considering the

monthly average price, South Africa’s 42% powder ore price dropped

from 37.36 yuan/mtu in March to April’s 35.94 yuan/mtu, Turkey’s 42%

lump ore price dropped from 47.96 yuan/mtu in March to 47.25 yuan/mtu

in April. Confidence on the market started to recover since the range of

price drop was very limited.

According to statistics data, the inventory of chromium ore at Chinese

ports was 2,750kt by the end of April, down by 300kt comparing with

3,050kt at the end of March, and the 300kt drop in inventory was the

maximum drop of the year. Current market condition is not stable that

companies are more willing to avoid risks through spot purchasing.

Inventory at Lianyungang was 1,300kt, down by 100kt comparing with

March, and the inventory at Shanghai ports was 500kt, down by 100kt

comparing with March. The statistic data of April showed that inventories

at main ports all tended to decrease on a weekly basis.

Import of Chromium Ore Down by 4.2% Y-o-Y in March 2012

According to customs statistics, the import volume of chromium ore was

758.9kt in March 2012, up by 10.95% comparing with 684kt in February,

but down by 20.97% from 960.3kt a year earlier. Import volume from

South Africa was 407kt, up by 37.79% comparing with 295.38kt in

February; import volume from Turkey was 146.6kt, down by 3.7%

comparing with 152.2kt in February. The increase in import from South

Africa was mainly because ferrochrome producers in South Africa were

more willing to export chromium ore instead of producing low profit margin

ferrochrome. And from the current situation, South Africa’s ferrochrome

output in Q1 would be reduced by 350kt due to restriction on use of

electricity power, and their price is not as competitive as domestic price. It

is expected that import of ferrochrome will not increase largely and import

of chromium ore may rise.

SSRM201205

12

Import of Chromium Ore in Mar. 2011-Mar.2012, Unit: 10kt

High-carbon

Ferrochrome

Price of high-carbon ferrochrome showed a tendency to decline in April,

average price was 7,620 yuan/base tonne in April and 7,770 yuan/base

tonne in March. Price gradually declined till the end of month and started

to recover when price of chromium ore tended to rise. Bidding price from

steel companies surfaced at the end of the month and the price

maintained the same level as last time, most people from the industry

believed price of ferrochrome had reached the bottom.

Price of high-carbon ferrochrome showed a tendency to decline in April,

average price was 7,620 yuan/base tonne in April and 7,770 yuan/base

tonne in March. Price gradually declined till the end of month and started

to recover when price of chromium ore tended to rise. Bidding price from

steel companies surfaced at the end of the month and the price

maintained the same level as last time, most people from the industry

believed price of ferrochrome had reached the bottom.

Domestic High-carbon Ferrochrome Price in Jan.-Apr. 2012, Units:

yuan/base tonne

SSRM201205

13

Bidding Price of

China’s Steel

Companies to Be

Stabled in May

Jiuquan Iron & Steel Group Co., Ltd (JISCO) was the first company that

released the bidding price for May, and the price was 7,650 yuan/base

tonne, which remained the same level as last time. Following JISCO, Bao

Steel announced the same price of 7,650 yuan/base tonne, however the

price from TISCO was still unclear. TISCO’s bidding price in April was

7,480 yuan/base tonne, which was the lowest price in history. It is

expected that TISCO’s price for May would rise, but the expectation for

TISCO is falling and the estimated price would be 7,500 yuan/base tonne.

Public Bidding Price of China’s steel companies, Unit: yuan/base

tonne

TISCO Bao Steel JISCO

2012.05 7650 7650

2012.04 7480 7650 7650

2012.03 7700 7850 7850

2012.02 7800 7850 7800

2012.01 7600 7650 7600

2011.12 7300-7400 7450 7700

2011.11 8050 7700 7800

2011.10 8350 8250 8150

2011.09 8450 8400 8250

2011.08 8100 8075 8100

2011.07 7750 7850

2011.06 8250 8300 8150

2011.05 8850 8875 8600

Note: TISCO’s payment method was half by acceptance, half by cash in Oct.-Nov. 2011 and all by

cash after Dec.2011.

SSRM201205

14

Ferrochrome

Plant’s Profit

Drove High

Operating Rate

Based on the current cost of chromium ore, the production cost of

ferrochrome in Shanxi would be estimated as 7,511 yuan/base tonne in

early May, up by 50 yuan/base tonne comparing with the cost at the end

of April. It is very difficult for raw materials to maintain such profit margin

since stainless steel manufactures are suffering from squeezed profit

margins. The operating rate in Shanxi is always at a satisfactory level and

70% of the capacity has been released. As the arrival of wet season in

May, operating rate in Sichuan will start to rise.

April’s Import of

Ferrochrome up

by 48% M/M

According to customs statistics, China imported 168.5kt ferrochrome in

April, down by 29.18% y-o-y but increased by 48.07% comparing with

March. Total import of ferrochrome in Jan.-Mar. was 424kt, down by

19.09% y-o-y. Import volume from South Africa was 114.8kt in April,

counting 68% of the total import volume. Lianzhong Stainless Steel

Corporation (LISCO) was the largest importer, its import volume counted

30% of the total import volume. Second largest importer was TISCO,

counting 13% of the total. Bao Steel counted 11% of the total and

Tsingshan Holding Group 7%. The lowest cost of the imported

ferrochrome in March was 0.91 US dollar/pound, and most cost were at

0.94 US dollar/pound, corresponding domestic price were 7,467

yuan/base tonne and 7,713 yuan/base tonne, respectively. The prices

were at the same level as late January. Given the price movement from

abroad, cost of the imported resources would be lower than April and

May.

Apparent

Consumption of

Ferrochrome in

Q1 2012

Apparent consumption of China’s ferrochrome was 849.8kt in Q1 2012,

up by 6.8% y-o-y. Actual consumption of stainless steel industry was

806.9kt. If stainless steel counted 90% of ferrochrome consumption, then

China’s actual consumption volume of ferrochrome would be 896.6kt. The

balance of supply and demand was negative -46.8kt, which indicated that

the inventory of ferrochrome had started to drop.

SSRM201205

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Apparent Consumption of Ferrochrome in Q1 2012, Unit: 10kt

Output Import Volume Export Volume

Apparent

Consumption

2012.03 16 16.85 0.31 32.54

2012.02 14 11.38 0.236 25.14

2012.01 14 14.16 0.8618 27.30

Q1 Total 44 42.39 1.4078 84.98

Market Outlook

Demand for ferrochrome will show a tendency to decline in May but the

drop will be very limited, stainless steel manufacturers’ profit margin is

being squeezed and some may perform equipment maintenance in May.

Supply of ferrochrome will increase since profit margin of ferrochrome

plants still exists, especially when the wet season is coming, cost of

electricity reduces and operating rate is boosted. In addition, the effect of

South Africa’s output reduction will reflect and domestic price may be

lifted by the high price of ferrochrome from abroad. It is expected that

ferrochrome market will be in a dynamic equilibrium and price will be

stabilized, however it is possible that the price may appear to rise slightly

in late May.

SSRM201205

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Tungsten

Price review In Q1, the domestic and overseas demand was weak due to the

impact of debt crisis in Europe, U.S.A economy weakness and

slowing down growth in Chinese economy. Prices of wolfrimate

concentrate, APT and tungsten carbide powder decreased to

123,000-125,000yuan/t, 192,000-193,000yuan/t and

310-312yuan/kg, respectively from 137,000-139,000yuan/t,

210,000-212,000yuan/t and 335-340yuan/kg.

Entering April, the tungsten price continued to fall with more and

more negative predictions. Tungsten concentrate and APT prices

respectively dropped to 119,000yuan/t and 186,000yuan/t in

middle April. The situation turned better latterly. On one hand, the

tungsten price started to rebound due to support of partial

optimistic economy statistics and related measure boosting

domestic demand being issued. On the other hand, enterprises

basically stopped purchase because of price decrease in previous

period. After the prices of tungsten concentrate and APT dropped

below 120,000yuan/t and 190,000yuan/t, some enterprises and

traders could accept them and started to purchase products, so

price in later the month resumed a little. At the end of April, prices

of tungsten concentrate and APT were rebounded to

122,000-124,000yuan/t and 190,000-192,000yuan/t, respectively.

Antaike believes the price rebound is a good signal that tungsten

has possibility to go up. However, generally, consumption recover

still needs good macro-economy statistics to support. There is

inventory in Q1, so the price is lack of motivation to rise in short

term.

Domestic tungsten concentrate price (Unit: Yuan/t) European APT price (Unit: US$/t)

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

Jan‐05

Jul‐05

Jan‐06

Jul‐06

Jan‐07

Jul‐07

Jan‐08

Jul‐08

Jan‐09

Jul‐09

Jan‐10

Jul‐10

Jan‐11

Jul‐11

Jan‐12

0

50

100

150

200

250

300

350

400

450

500

Jan‐05

Jun‐05

Nov‐05

Apr‐06

Sep‐06

Feb‐07

Jul‐07

Dec‐07

May‐08

Oct‐08

Mar‐09

Aug‐09

Jan‐10

Jun‐10

Nov‐10

Apr‐11

Sep‐11

Feb‐12

APT（欧洲）

SSRM201205

17

Chinese tungsten import (Unit: t) Chinese tungsten export (Unit: t)

Export continues to

drop down

The Spring Festival was in January and demand then was plain,

export decreased obviously as well. The tungsten products export

was 1,584t in Jan., down by 19% m-o-m or down by 29% y-o-y.

The export of tungsten products in Feb., was 1,518t, down by 4%

m-o-m. The export in Mar. was 1,808t, up a little by 2% m-o-m. The

total export in Jan.-Mar. was 4,910t, down by 20% y-o-y.

February is the first normal export month after holidays.

Traditionally, the export of tungsten products could be resumed

around 2,000t. However, the actual export in February was

slipping, which obviously shows overseas demand slowing down.

In March, although purchase was raised a little, the growth rate

was small, being lower than that in the same period last year.

Tungsten carbide are still major exported products. Except for

tungsten carbide, whose export in March was raised a little, other

products including APT, export of blue tungsten oxide and yellow

tungsten oxide slipped down, especially the APT export.

APT and Tungsten carbide export Yellow and blue tungsten oxide export

0

100

200

300

400

500

600

700

800

Jan‐09

Mar‐09

May‐09

Jul‐09

Sep‐09

Nov‐09

Jan‐10

Mar‐10

May‐10

Jul‐10

Sep‐10

Nov‐10

Jan‐11

Mar‐11

May‐11

Jul‐11

Sep‐11

Nov‐11

Jan‐12

Mar‐12

0

500

1000

1500

2000

2500

Jan‐09

Mar‐09

May‐09

Jul‐09

Sep‐09

Nov‐09

Jan‐10

Mar‐10

May‐10

Jul‐10

Sep‐10

Nov‐10

Jan‐11

Mar‐11

May‐11

Jul‐11

Sep‐11

Nov‐11

Jan‐12

Mar‐12

690

311 

187 

356

154 

0

100

200

300

400

500

600

700

800

吨

ATP 碳化钨

403

312 242 

549

834 

0

200

400

600

800

1,000

1,200

吨

黄色氧化钨 蓝色氧化钨

SSRM201205

18

Chinese tungsten import was steady. 463t was exported in Mar.

2012, down by 19% y-o-y. In Jan.-Mar., the import was 1,418t,

down by 5% y-o-y. The tungsten concentrates import in Q1

decreased by 5% to 1,192t. They are mainly imported from Russia,

Canada, Rwanda and so on.

MOFCOM issued the first batch of export quota in 2012 for

tungsten, antimony, indium, tin, molybdenum and silver. Seen from

the quota, Chinese export of minor metals would be oriented to

deep-processing products with advanced technology, and quota

for primary raw materials would shrink in large scale. The quota for

tungsten acid and salts was plummeted by 67.27% y-o-y, while

quota for tungsten powder and products grew by 71.67% y-o-y.

Chinese tungsten concentrate output (65% WO3)

0 

2000 

4000 

6000 

8000 

10000 

12000 

14000 

Jan‐10

Feb‐10

Mar‐10

Apr‐10

May‐10

Jun‐10

Jul‐1

0

Aug‐10

Sep‐10

Oct‐10

Nov‐10

Dec‐10

Jan‐11

Feb‐11

Mar‐11

Apr‐11

May‐11

Jun‐11

Jul‐1

1

Aug‐11

Sep‐11

Oct‐11

Nov‐11

Dec‐11

Jan‐12

Feb‐12

Mar‐12

Supply maintains

growth, inventory

pressure enlarged

In accordance with statistics released by CNIA, the output of

tungsten concentrate in Mar. 2012 was 13,176t (65% WO3), up by

22% m-o-m. The output in Q1 was 30,737t, up by 25% y-o-y.

Output in Jiangxi was 15,646t in Q1, up by 32.16% y-o-y. Hunan’s

output was 7,234t, up by 12.51% y-o-y. Henan’s output was 3,495t,

up by 26.49% y-o-y. Seen from the statistics, domestic mine

enterprises remained stable operation and didn’t cut production

despite of weak demand.

Antaike got sources that mines gradually resumed production

after Spring Festival, and the output has already reached normal

level, which should be the same with statistics counted by CNIA.

Meanwhile, the tungsten concentrate price kept falling and some

enterprises would not like to sell products, and there is still small

volume of stock in market. Downstream demand was poor, but

smelting enterprises still maintained 80% operating rate in order to

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sustain the whole operation. Those enterprises covering long

production line still processed large amount of mineral into

smelting products. Therefore, Antaike believes most of the market

inventory concentrated in APT.

Weak consumption and

oversupply

Tungsten market in Q1 had 5,572t oversupply (metal content).

The domestic tungsten consumption in the period was 8,155t,

down by 10% y-o-y. The export was 4,910t, down by 20% y-o-y.

China imported 1,418t tungsten in Q1, down by 5% y-o-y. The

domestic tungsten concentrate supply was 15,829t, up by 25%

y-o-y. 1,390t scarp tungsten was recycled, slightly decreased. The

demand was weak in Q1 and the oversupply directly resulted in

9% decrease in tungsten concentrate price.

Tungsten concentrate price in Apr. would be raised in small

scale

On Apr. 17, IMF issued the latest World Economy Outlook, in

which it is expected global economy to see 3.5% and 4.1% growth

in 2012 and 2013. In addition, the report also said Chinese

consumption and investment would kept strong despite of slipping

demand in overseas market. It is forecasted that Chinese economy

would increase by 8.2% in 2012, being higher than the target of

7.5% set by China government; Chinese economy growth rate

may rebound to 8.8% in 2013.

Meanwhile, global demand prospect is good. In April, Chinese

PMI was 53.3% , up by 0.2% compared with that in March. The

index has been higher than the level in corresponding time last

year, which showed macro-economy was developing towards

better direction. PMI in USA was 54.8 in Apr., compared with 53.4

in Mar. and being higher than 53 expected by market.

Therefore, Antaike still sees hope from gloomy demand and

believes it would turn better in Q2. However, the price won’t

increase in large scale when facing inventory accumulated in one

year. The practical resume should be expected in Q3.

In short term, the current quotation of wolfrimate concentrate has

been raised to 124,000-126,000yuan/t. China Minmetals and GTA

are likely to give guiding price of wolfrimate concentrate at

128,000yuan/t for May in order to boost market. It is expected the

price of tungsten in May would reach 128,000yuan/t and started to

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go up in volatility.

Balance sheet in Q1 (Unit: t, metal content)

Output y-o-y（%）

Demand Consumption

Cemented carbide 3,655 -20%

Tungsten special steel 2,800 -5%

Tungsten semis 1,000 -4%

Tungsten chemical 700 -

Total 8,155 -10%

Export 4,910 -20.0%

Supply

Import 1,418 -5.0%

Output 15,829 25.0%

Scrap tungsten 1,390 -

Balance 5,572

Average monthly price of wolfrimate concentrate (Unit: yuan/t)

2010 2011 2012

Jan. 71,500 120,267 135,571

Feb. 74,000 130,632 131,923

Mar. 74,500 137,154 127,333

Apr. 76,000 137,154 121,647

May 81,143 154,923 128,000*

Jun. 82,500 144,750

Jul. 83,700 136,389

Aug. 83,083 152,067

Sept. 86,342 153,556

Oct. 91,944 140,000

Nov. 101,278 133,076

Dec. 111,053 135,500

Yearly

average price 84,754 139,603 150,000*

* Estimated by Antaike

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Cobalt Market review

Oversupply situation on domestic market was still serious. According

to the latest statistics from the Customs, import of cobalt raw material

decreased sharply, domestic cobalt smelters began to consume the

original inventory or adhere to purchase domestic cobalt salt as raw

material for production. Cobalt consumption in the field of battery

increased slightly in April but other terminal consumption fields has not

changed obviously.

The domestic cobalt price in late Mar. decreased to

235,000-250,000yuan/t, touching the lowest in recent two months,

although international cobalt price increased in Apr., domestic players

lacked of confidence in future market and they still took a wait and see

attitude, cobalt price maintained the low level as Mar. In the second

half of Apr., with the improvement of the strong international price, the

domestic cobalt price increased to 240,000-250,000yuan/t. The

average domestic cobalt price was 243,800yuan/t in Apr., down by

1.3% m-o-m.

Average Quotation of Cobalt on Chinese Spot Market

Changjiang (yuan/t)

2004 440,300-464,300

2005 334,100-351,100

2006 323,400-356,000

2007 521,500-540,600

2008 630,000-647,300

2009 328,800-345,300

2010 346,600-369,900

2011 281,200-299,900

2012-1 237,000-252,000

2012-2 240,200-257,800

2012-3 239,500-255,200

2012-4 237,600-250,000

Source: Antaike

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Comparison of Chinese Cobalt Quotation

Source: Antaike

Import of domestic

cobalt raw material

decreased in Mar.

2012

According to the statistics from the Customs, import of cobalt ores &

conc. was 11,807t in Mar., down by 43.6% m-o-m and down by 63.4%

y-o-y. In the first three months, the accumulative import of ores & conc.

was 46,789t, down by 46.5% y-o-y.

Import of intermediate products of cobalt wet-processing metallurgy

was 3,908t in Mar., down by 19.2% m-o-m and down by 25.6% y-o-y.

From Jan. to Mar., import of intermediate products of cobalt

wet-processing metallurgy was 11,937t, down by 12.7% y-o-y. In

addition, import of alliage blanc 338t in Jan.-Mar. 2012, down by 81%

y-o-y.

The reasons for the decreasing of cobalt raw material are as follows:

on the one hand, domestic smelters owns rich raw material inventory

and they began to consume the original inventory or adhere to

purchase domestic cobalt salt as raw material for production; on the

other hand, partial smelters stopped or reduced production, which also

declined the demand for cobalt raw material.

Furthermore to remind readers that the nickel-cobalt project of

Metallurgical Corporation of China Ltd. and nickel-cobalt project of

Ravensthorpe all have been commissioned, nickel hydroxide as the

intermediate product also actively developed Chinese market, which

will enter into Chinese market in H2 2012, other nickel-cobalt projects

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will be commissioned gradually in H2 2012, thus domestic raw material

supply will become more and more sufficient.

Export of lithium

cobalt oxide

increases but

cobalt salt

decreases in Q1

According to the latest statistics from the Customs, export of lithium

cobalt oxide was 1,807 in Q1, dramatically up compared with 1,050t in

the same period of 2011.

Export of cobalt tetroxide was 787t, down by 9.8% y-o-y; export of

cobalt carbonate was about 229t, down by 60% y-o-y.

Currently due to low cobalt price, many Japanese and South Korean

battery enterprises preferred to import lithium cobalt oxide anode

material directly. Import of cobalt tetroxide, cobalt carbonate and other

lithium cobalt oxide anode precursor decreased. China exported about

4,500t lithium cobalt oxide in 2011. If export of lithium cobalt dioxide

keeps this growth rate in 2012, export in 2012 will expected to realize a

50% growth rate.

Also worth mentioning that more and more foreign battery producers

began to develop the industrial chain in China, including lithium cobalt

oxide anode material, ternary precursor and other upstream products.

According to the understanding from Antaike, most foreign battery

enterprises enter into Chinese market through acquisition and shares

participation of domestic cobalt smelters, such as SK Group purchased

shares of Zhejiang Elite Cobalt & Nickel Material Co., Ltd and

produced ternary precursor.

Domestic cemented

carbide output to

reaches 23.5kt in

2011

According to the statistics from Cemented Carbide Branch of China

Tungsten Association, Chinese cemented carbide output was 23.5kt in

2011, up by 6.8% y-o-y; hard facing material output was 1,257t, down

by 13% y-o-y; cemented carbide mixture output was 3,426t, up by

1.5% y-o-y.

From 2008 to 2011, output of domestic cemented carbide products

kept a stable growth, cobalt consumption in the field of cemented

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carbide reached 2,718t, up by 6% y-o-y.

High temperature

alloy output ups

13.2% y-o-y in Q1

2012

According to the statistics from Stainless Council of China Special

Steel Enterprises Association, domestic high temperature alloy crude

steel output in Q1 2012 was 2,323t, up by 13.2% y-o-y. Domestic high

temperature alloy crude steel reached 9,555t and cobalt consumption

was 950t. Cobalt consumption for this field of high temperature alloy is

expected to exceed 1,000t and reach 1,100 in 2012.

Domestic PTA

output to reach

21Mt in 2012

A source says domestic PTA output was above 15Mt in Jan.-Nov.

2011 and total output in 2011 is expected to be 16.45Mt, up by 15%

compared with 2010. Domestic PTA industry will face to a new round of

expansion period from Q2 2012, domestic PTA capacity in 2012 is

expected to increase from 10.3Mt to 30.46Mt and the growth rate will

be 51%. Domestic PTA output in 2012 is expected to be 21Mt, up by

28% y-o-y and the average monthly output will reach 1.75Mt.

If domestic PTA output in 2012 reaches 21Mt, which will promote

cobalt acetate reducing agent consumption in that field. Cobalt

consumption in that field is expected to be 1,135t.

Outlook

Oversupply situation is still existed in domestic market, due to lack of

confidence in future market, terminal consumers were unwilling to

prepare and purchase stock; domestic cobalt prices will follow cobalt

prices in global market in future but fluctuate limitedly

Imports of Cobalt Products in Mar. 2012 Unit：t, US$

Quantity Value

Commodity Mar. Jan.-Mar. Mar. Jan.-Mar.

Cobalt ores & conc. 11,807 46,789 2,705 10,385

Cobalt tetroxide 43.1 54.1 106.8 127.2

Other cobalt 11.5 73.4 29.5 124.8

Cobalt chloride 0.2 0.201 0.92 0.96

Cobalt Sulfide 0 0 0 0

Cobalt nitrate 0 0 0 0.036

Cobalt carbonate 0.21 0.34 1.1 1.66

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Quantity Value

Commodity Mar. Jan.-Mar. Mar. Jan.-Mar.

Lithium cobalt oxide and other

salt 360 1,100 588.8 1,489

Cobalt and cobalt salt (kg) 29 48.7 260 394

Intermediate products of

cobalt wet-processing

metallurgy

3,908 11,937 2,246 7,065.5

Ultrafine cobalt powder, cobalt

mattes, unwrought cobalt and

powders etc (≥99.5%)

1,341 2,512 1,483 3,522

Other cobalt products 19.4 51.2 304 847

Total 17,490 62,517 7,465 23,563

Source：Customs

Exports of Cobalt Products in Mar. 2012 Unit：t, US$

Quantity Value

Commodity Mar. Jan.-Mar. Mar. Jan.-Mar.

Cobalt tetroxide 270.3 787.4 686.7 1,976.2

Other cobalt 70.3 98.5 156.7 243

Cobalt chloride 12.5 19.4 10.5 16.5

Cobalt Sulfide 0 0 0 0

Cobalt nitrate 1.5 3.5 1.6 3.6

Cobalt carbonate 105.4 228.6 180.6 395.3

Lithium cobalt oxide and other

salt 2,521 7,040 2,251 5,538

Cobalt and cobalt salt (kg) 0.12 1.13 4 4.1

Cobalt oxalate 106 370 124.7 431.3

Intermediate products of

cobalt wet-processing

metallurgy

0 0 0 0

Ultrafine cobalt powder, cobalt

mattes, unwrought cobalt and

powders etc (≥99.5%)

361.6 946.7 1,335 3,332

Other cobalt products 0 0.062 0.07 1.5

Total 3,449 9,494 4,747 11,937

Source：Customs

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Molybdenum

Molybdenum price

still weak in April

The market confidence for the economy in Europe was lower than

previous anticipation in April that put a big stress on global

molybdenum price. The European drummed molybdic oxide price

averaged at US$ 14.2/lb in April, up by 0.3% y-o-y; that of

western-grade ferro-molybdenum (65-70% Mo content) averaged at

US$ 34.34/kg, down by 0.1%.

The international molybdenum price headed up in early April, then,

slipped down again in late of the month. Steel mills purchased the raw

material at the beginning of April, which raised the demands and led to

more inquiries. Accordingly, the molybdenum price increased. After the

Easter Holidays, the transaction weakened, and became rare again by

the end of the month.

The European drummed molybdic oxide price increased to

US$ 14.2-14.35/lb from US$ 14-14.25/lb in the first half of April, and

declined to US$ 14.1-14.2/lb at the end of the month.

The price of western-grade ferro-molybdenum (65-70% Mo content)

increased to US$ 34.4-34.8/kg from US$ 34-34.5/kg in the first half

month, and declined to US$ 34.2-34.6/kg by the end of the month.

The American molybdic oxide climbed to US$ 14.2-14.2/lb (Mo

content) from US$ 13.9-14.1/lb in April, while the American

ferro-molybdenum increased to US$ 16.25-16.4/lb from

US$ 15.85-16.1/lb in the month.

The Chinese molybdenum prices were stable in April. The domestic

molybdenum concentrate (45% Mo content) price was at around RMB

1,820-1,830/mtu in April; the industrial ferro-molybdenum (60% Mo

content) was at RMB 12,200-12,400/mtu. The domestic steel mills

purchased two batches of raw material in early and end April,

respectively. But, the settled price was in low level, which failed to

support the molybdenum price. The domestic molybdenum price is

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closing the production cost. Smelters are suffering deficit, while the

miners are facing loss in production.

0

5

10

15

20

25

30

35

40

45

50

2003-2012 MB Moly Price

drummed molybdic oxide canned molybdic oxide western-grade ferro-molybdenum

chinese-grade ferro-molybdenum American ferro-molybdenum

$/lb

0

1000

2000

3000

4000

5000

6000

7000

8000

2003-2012 Domestic Moly Price

Ferro-moly Moly Concentrate Molybdic Oxide

Chinese mine

molybdenum

production up by

9.4% in Jan.-Mar.

The Chinese molybdenum concentrate output was 9,536 tonnes

(hereinafter refer to metal content) in Mar., 2012, up by 9.4% m-o-m

and 9.4% y-o-y, according to the statistics released by China

Nonferrous Metals Industry Association (CNIA). By regions, Henan

produced 3,996 tonnes of molybdenum concentrate in March; Shaanxi

produced 1,870 tonnes; Inner Mongolia produced 1,654 tonnes; Hebei

produced 721 tonnes. The top 4 production regions jointly account for

86.4% of the national total output in March.

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In the first quarter, China produced 25,641 tonnes of molybdenum

concentrate, up by 11.5% y-o-y. By regions, Henan produced 11,114

tonnes of molybdenum concentrate in Jan.-Mar., up by 3.4% y-o-y;

Shaanxi produced 5,106 tonnes, up by 19.7%; Inner Mongolia

produced 3,204 tonnes, up by 40.4%; Hebei produced 1,820 tonnes,

down by 4.7%. The top 4 production regions jointly account for 82.9%

of the national total output in the first 3 months.

Chinese molybdenum concentrate output (physical weight, average grade 45%)

Unit: tonne

Mar. 2012 Jan.-Mar. 2012 Chn y-o-y (%)

National Total 21,192 56,981 11.45

Hebei 1,603 4,044 -4.71

Inner Mongolia 3,676 7,121 40.43

Liaoning 393 1,578 6.55

Jilin 627 2,053 16.85

Heilongjiang 159 820 -11.64

Zhejiang 163 663 223.41

Fujian 513 1,027 -11.77

Jiangxi 552 2,165 29.41

Henan 8,881 24,697 3.35

Hubei 62 286 33.02

Hunan 186 592 51.02

Guangdong 22 54 80.00

Guangxi 0 0 -

Hainan 40 40 -27.27

Sichuan 149 421 -6.24

Yunnan 10 73 -12.05

Shaanxi 4,156 11,347 19.66

Source: CNIA

Chinese

molybdenum export

down by 36.2% in

Jan.-Mar. 2012

The Customs statistics show that China exported 1,366 tonnes of

molybdenum products (hereinafter refer to metal content) in Mar.,

2012, up by 4.3% m-o-m and down by 36.2% y-o-y. By products, the

molybdic oxide export was 655 tonnes, down by 9.2% m-o-m and

down by 41.2% y-o-y, accounting for 48% of total molybdenum export.

The export of molybdenum rod, bar, profile and special profile was 436

tonnes, up by 47.8% m-o-m and up by 110% y-o-y, accounting for

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31.9% of total export. The export of ammonium molybdate was 63

tonnes, up by 1.6% m-o-m and down by 52.3% y-o-y, accounting for

4.6%. The 3 products jointly contribute 84.5% of total molybdenum

export in March.

In the first three months, China exported 4,035 tonnes of

molybdenum, down by 30.9% y-o-y. The molybdic oxide export was

2,220 tonnes, down by 36.7% y-o-y, accounting for 55% of the total

export; the export of molybdenum rod, bar, profile and special profile

was 1,022 tonnes, up by 7.2% y-o-y, accounting for 25.3%; the

ammonium molybdate export was 248 tonnes, up by 2.5%, accounting

for 6.1% of total molybdenum export. The 3 products jointly represent

86.5% of total export in the first quarter.

Chinese

molybdenum import

down by 8% in

Jan.-Mar. 2012

China imported 537 tonnes of molybdenum products in Mar., 2012,

down by 21.4% m-o-m and down by 8% y-o-y, of which, the molybdic

oxides import was 441 tonnes, down by 29.2% m-o-m and down by

11.6% y-o-y, accounting for 82.1% of the total molybdenum import.

Meanwhile, the other molybdenum products import was 4 tonnes,

down by 87.9% m-o-m and 20% y-o-y, accounting for 0.7%; the

molybdenum concentrate import was 43 tonnes in Mar., which was

zero in the previous month.

In the first three months, China imported 1,899 tonnes of

molybdenum products, down by 21.1% y-o-y. Of which, the molybdic

oxide import was 1,607 tonnes, down by 26.5% y-o-y, accounting for

84.6% of the total molybdenum products import; the molybdenum

concentrate import was 118 tonnes, up by 29.6%, accounting for 6.2%

of the total; the other molybdenum products import was 40 tonnes, up

by 210% y-o-y, accounting for 2.1%. The 3 products jointly represent

92.9% of total import in the first quarter.

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China’s Imports and Exports of molybdenum products (physical weight)

Unit: tonne, mlnUS$

Items

Import Export

Quantity

in Mar.

Quantity

Y-T-M

Value in

Mar.

Value

Y-T-M

Quantity in

Mar.

Quantity

Y-T-M

Value in

Mar.

Value

Y-T-M

Roasted Mo

concentrate 773 2,820 14.05 51.08 1,235 4,188 23.27 78.86

Other Mo

concentrate 83 228 0.86 2.26 0 129 0 1.34

Mo oxide and

hydroxide 0 40 0 0.73 72 227 1.40 4.73

Ammonium

molybdate 30 61 0.59 1.20 114 451 2.31 8.83

Other Mo Salts 0 2 0 0.07 39 120 0.60 2.03

FeMo 4 25 0.09 0.59 36 56 0.99 1.55

Mo powder 14 26 0.82 1.50 85 241 3.43 9.58

Unwrought Mo 2 7 0.18 1.00 0 0 0 0.01

Mo bar and

section 11 27 3.12 7.93 437 1,024 19.71 46.03

Mo wire 4 8 0.41 1.39 37 113 2.41 7.22

Mo scraps 0 0 0 0 0 0 0 0

Other Mo

products 4 40 1.70 11.82 5 84 0.61 4.39

Total 924 3,285 21.82 79.56 2,061 6,631 54.73 164.58

Sources: China Customs

Outlook

It is estimated the global economy will keep resuming steadily in

2012 and 2013, but slower than 2010 and 2011. There are still big risks

from the problems in Euro Zone that may affect the economic growth in

emerging countries as well as developed countries.

There are still not obvious supporting news for international

molybdenum market. It is still expected that there would be users to

purchase the molybdenum materials in May, and lead to a raise of

prices. However, even if there are buyers, the molybdenum conc. price

would be less change to increase by more than US$ 0.5/lb. In domestic

market, the ferro-molybdenum transaction in April was in low price that

further drew down the domestic molybdic oxide and molybdenum

conc. price. In that case, the prices may slip deeper in May.