Wednesday, October 15, 2008

Beijing trims 2% off tungsten export quota for 2009

Singapore 15 October 2008 09:31

Beijing has cut the country's tungsten export quota by 2% or 300 tonnes in pure metal for 2009, in the mildest revision seen in years.

Export quota cuts have ranged from 500-900 tonnes in the past few years, with the steepest 900-tonne cut for this year, market participants confirmed.

This takes the 2009 tungsten export quota to 14,600 tonnes for licensed tungsten producers and exporters, a volume that will probably be more than enough, according to market participants.

"Most the companies will fail to use up this year's quota. By August, some will have used 80% at most, while others 40-50% at least. Next year, the overall prospect is not great. I do not think quota cut will be a problem for anyone," a Beijing-based trader said.

Another trader in south China agreed.

"All of us have been hit hard by the higher export taxes this year, and financial crisis will probably bring us another bleak year, so we are not worried at all about whether the quota is insufficient," she said.

However, market participants agreed that the tungsten export market should be considered "fortunate" in a non-ferrous industry where several other metals are seeing tumbling prices.

"It at least shows that demand and supply in this particular market are more or less balanced, so the supply side is not ready to jump yet," the Beijing trader said.

Despite a persistently quiet week, China's tungsten concentrate prices have remained at 86,000 yuan ($12,588) per tonne and ferro-tungsten at $34 per kg fob, and ammonium paratungstate (APT) offers are still above $250 per mtu fob.

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