Antimony trioxide price climbing higher everywhere

Following the increasing antimony metal price, price of antimony trioxide also increased in European market.
A European trader sold 10t of 99.5%min antimony trioxide to a local customer at USD3,900/t in warehouse Rotterdam in the end of last week, and he sees the price increased by USD100/t compared to the week before. The source claimed that his sales of the material is about 5-10t each week in April. "There is demand of antimony trioxide, but very little compared to last year," said the source.
He holds that there is no shortage of antimony trioxide in European market because there are several local producers, also all of them are not producing at the full capacity right now. However, since the Chinese suppliers increased the antimony quotations, European producers raised their offers too as they claimed higher raw material cost. Because the increasing price is not driven by increasing demand, the trader expects price to stabilize soon.
Another European trader confirmed the increasing price of antimony trioxide in Europe. "Chinese offers rose by USD200/t in the last two weeks from USD3,600-3,800/t to currently USD3,800-4,000/t CIF Rotterdam, and the material in Rotterdam warehouse increased from USD3,700-3,800/t to USD3,900-4,000/t in warehouse Rotterdam.
Agreed with the previous source, the trader thinks that the main reason of the higher price is due to the announcement from Chinese government that Hunan province was going to invest over one billion RMB on metal stock. "But the metals also including some base metals, antimony is going to be very small part of it," said the trader, and he thinks there is no momentum for price to increase further.

Increased value-added tax rates on minerals kick in

A higher value-added tax (VAT) on 82 mineral products became effective Thursday.

China raised the VAT rate for minerals two months ago to ease the burdens of producers. Mineral producers welcomed the policy but analysts are uncertain whether the new tax rates would bolster the sector.

The VAT rate for such mineral imports as copper ore, nickel ore, aluminum ore as well as ore concentrates was raised to 17 percent from 13 percent, according

to the Ministry of Finance and the State Administration of Taxation.

The two ministries said the new rates will cover both ferrous and nonferrous metals and non-metal minerals. The rate for salt would remain unchanged at 13 percent.

"The four-percent increase is an adjustment of a big margin," a source inside the Henan Yuguang Gold and Lead Co. said. The man, who preferred to remain anonymous, added the company would be able to save a large amount of money it would have spent on taxes and will therefore be able to reduce costs.

Thanks to higher VAT rates, such companies will be able to deduct a larger amount of taxes paid for ore imports when they sell final products.

Jiang Ning, an analyst with the Shanghai-based nonferrous metals website, said it was too early to tell whether the nonferrous metal sector would perform better.

Nonferrous metal producers have posted all-round losses after prices fell by 20 to 46 percent in last few months. Some producers were forced to suspend production to avoid further losses.

According to the National Bureau of Statistics (NBS), profits of the non-ferrous metal and processing industry fell 34.1 percent year-on-year in the first 11 months of 2008.

Jiang said he expected the nonferrous sector to have a poor performance in the first quarter of this year.

In addition to higher VAT rates, the country's State Reserve Bureau, which maintains stockpiles of key raw materials, was reported to be discussing a purchase of 300,000 tonnes of aluminum at a premium price from producers. The move is aimed at increasing prices and supporting producers.

Jiang said if that happens, such a move would only be effective in the short term and was not enough to change the long-term trend. He added that the biggest problem for non-ferrous metal producers was insufficient demand after global financial turmoil slashed demand across the world.

The steel sector also suffered because of retreating global demand. The NBS said profits of the iron and steel industry fell by 13.7 percent during the first 11 months of 2008.

Many analysts said the metal industry in general is regaining confidence as a result of the proposed purchase plan. They said increased infrastructure construction would also boost demand for steel.

The VAT rate hike for mineral products was part of the country's more broad VAT reform which exempts companies from paying value-added tax for equipment purchases.

The reform was announced in November and included in the 4 trillion yuan (586 billion U.S. dollars) stimulus package.

The VAT reform is expected to reduce the tax burden on companies by more than 123 billion yuan next year.

In 2007, VAT revenue exceeded 1.5 trillion yuan, accounting for31 percent of the country's total tax income.

Re: China puts ceiling on 2009 output of tungsten, antimony, rare earth

China's coal enterprises all appealed to the government for halting the resource tax reform considering the general gloomy economic situation and growing burden in coal production cost, according to market source.

Instead, coal enterprises asked for subsidy to value added tax to alleviate their production cost.

In a symposium held by Research Office of the State Council on March 18, coal enterprises claimed that the rise in cost pressure is the main reason for their reluctance to drop the coal price.

So far, domestic coal enterprises haven't conceded to China's five power giants on contractual coal price because of their high production cost.

Nevertheless, the ongoing research on resource tax reform plan has triggered coal producers' concern over further cost increase.

Meanwhile, coal enterprises are more likely to see a drop in coal price as some small coalmines resume production and the international coal price is in decline.

According to a coal enterprise source, many local coal enterprises especially those mainly producing power coal, are living a tough life and even incurred loss.

Earlier, market rumor went that the government would charge resource tax at 10 percent of sale revenue, much higher than the market guess at 3-5 percent.

Shi Yu, analyst with China Merchants Securities hold that China's coal industry has entered the recession period due to the great impact of international financial crisis on China's economy, and it is expected to take 3-5 years to walk out of the trough.

China to raise export rebate for some nonferrous metals, report

Chinese government will adjust by a big range the import and export duties for some nonferrous metals in line with the draft of Adjustment and Development Plan for China's Nonferrous Industry, China Business News reported.

According to the draft, average export rebates for high-elegant copper tube, high-elegant copper plate and stripe, high-grade aluminum foil, high-grade aluminum formation products, high-grade aluminum plate and stripe will be raised from 5 percent to 13 percent.

Export rebate rate for deep-processed products, which can replace part of imported ones, will be raised to 17 percent.

Aluminum alloy formation products will receive an export rebate of 5 percent for the first time.

Export duty of aluminum alloy poles with section circumference of under 210mm will be cut from 15 percent to 5 percent.

The draft says domestic consumption of aluminum products won't shrink under the related bailout plans, but the growth rate may decrease.

Export duties on ferroalloy may be lowered

China, the world's largest ferroalloy producer, is possibly to lower export duties on ferrochrome and ferromanganese in the second half of this year from current 20 percent to assist domestic producers in export businesses, a source with the China Ferroalloy Industry Association said.

Meanwhile, the government will soon release a name list of ferroalloy producers that are allowed to bargain with power companies on electricity fees on monthly basis.

China produced 18.25 million tons of ferroalloy last year, up 4 percent year-on-year, and is expected to produced 14 to 15 million tons this year.

China's Yunnan In 2nd Round Of Metals Stockpiling For Reserves

China's Yunnan province launched its second round of metals stockpiling May 1, the provincial government's industry and communications committee said in a statement, in an effort to ensure steady growth for industries in the region.

The government buying includes purchases of copper, aluminum, lead, zinc and tin, as well as germanium, and industrial silicon, the statement said, referring to details in Yunnan's nonferrous metals stockpiling plan.

The move is similar to the province's first round of purchases of base metals in December, where it purchased a total of 552,000 metric tons of metals from nine producers.

The statement didn't specify the amount of metals the province plans to purchase this time but said other metal producers in addition to the nine in the first round are allowed to participate but will be under strict scrutiny in the application process.

The nine producers are Yunnan Aluminium Co., Yunnan Coal Chemical Industry Group, Yunnan Tin Co., Yunnan Luoping Zinc & Electricity Co., Yunnan Chihong Zinc & Germanium Co., Yunnan Jingding Zinc Co., Xiangyun Feilong Co., Yunnan Gejiu Electricity Plant, and Yunnan Copper Co..

Yunnan's second round of purchases will last eight months, from April 30 through Dec. 31, said the statement.

Total output of ferro-alloys by China in Q1 / 09 had decrease of 7%

Zone To Produce Silicon Alloys Had Considerable Decline In Its Output, Causing Tight Supply

The production activities of ferro-alloys in China for the first quarter (January – March) of 2009 were known. Namely, China produced 3,928,900 tons in total of ferro-alloys in January – March quarter of 2009, having decreased by 7.10% compared with that (4,227,900 tons) in the same quarter of 2008. For a reference, China produced 1,574,200 tons in total of ferro-alloys only in March of 2009, which had a decrease of 6.8% compared to that (1,689,000 tons) in the same month of 2008.

According to the data compiled and released by WSA (World Steel Association), China produced 127.44 million tons of crude steel in January – March quarter of 2009, having increased by 1.4% compared with that in the same quarter of 2008, and also produced 45.10 million tons of crude steel only in March of 2009, which had a slight decrease of 0.3% from that in the same month of 2008.

In comparison with a slight increase of crude steel production in China for January – March quarter of 2009, the total output of ferro-alloys in China for the quarter decreased to a considerable extent. This decline in production of Chinese ferro-alloys was due to a sluggish tone on exports of ferro-alloys from China and a sharp fall of prices for ferro-alloys caused by the depressed market. However, when the production activities of ferro-alloys at each district of China in the first quarter of 2009 were investigated in detail, the quantities of ferro-alloys produced in the so-called silicon land, consisting of Inner Mongolia Aut Region, Ningxia Hui Aut. Region and Gansu Province, had large decreases of 22 – 57% from those in the same quarter of 2008. These decreases in production of ferro-alloys had been caused by a severe winter climate but, as the silicon land faced the same severity in winter season of last year, the circumstances in both of 2008 and 2009 are thought to be on a similar level. Only the reason, why the production of ferro-silicon in China for the first quarter of 2009 had a substantial decrease, is supposed to be a negative intention to produce ferro-silicon as its price has fallen steeply. However, in August – September of this year when the stocks of ferro-silicon in Far Eastern region, including Japan, are anticipated to be reduced to reasonable levels, it is worried that price of Chinese ferro-silicon may have a sharp rise on the background of the tight supply.

On the other hand, although it was once informed that the production of manganese ferro-alloys in China is anticipated to have a large decrease, main districts in China contrarily increased the production. In view of the fact that China also produces manganese ores at local mines, main areas to produce manganese ferro-alloys in China have been symbolized by the four districts of Sichuan Province, Guizhou Province, Guangxi Zhuang Aut. Region and Hunan Province. In January – March quarter of 2009, Guangxi Zhuang Aut. Region had a slight decrease of 5.8% in production of manganese ferro-alloys but other three districts increased their production by 41.6% in Sichuan Province, by 46.4% in Guizhou Province and by 33.1% in Hunan Province respectively compared to those in the same quarter of 2008.

The market prices of manganese ferro-alloys had once reached a peak in August of 2008 but, after that, have turned to fall. Price of Chinese silico-manganese has currently come down to a level of US$1,100 per metric ton CIF Japan, which is half of US$2,450 as prevailed previously. Price of high carbon ferro-manganese is US$1,300 per metric ton CIF Japan at present.

Needless to say, these prices are not payable for its production costs. Accordingly, it was once informed that these manganese areas as mentioned above have decreased their output of manganese ferro-alloys in the first quarter of 2009 to a large extent but, on the contrary, the data indicated certain increases in production of manganese ferro-alloys at these areas. The market prices of Chinese manganese ferro-alloys, such as silico-manganese, have suddenly fallen considerably from February – March of 2009 and one of the reasons for this sharp fall of prices is supposed to be due to an increase in production of manganese ferro-alloys. It goes without saying that other factors are a sharp fall of prices for manganese ores imported into China as raw material and a positive action on sales of silico-manganese at discounted prices taken by India.

As an aftereffect on excessive imports of manganese ores committed by China in 2008, a surplus of manganese ores stocked in China is estimated at 1 – 2 million tons and it is essential for China to digest these excessive stocks of manganese ores as soon as possible. Even under the present situation which the international prices of manganese ores are in the direction to fall further for the future, China has been urged to digest the stocked raw materials. The main areas to produce manganese ferro-alloys in China are those, having delayed to develop its economic circumstances, and many of these areas have positioned to produce ferro-alloys as a core business for local economy. Therefore, from a point of view to sustain local economy, it is difficult for these areas to reduce their production of ferro-alloys