Ken Reser - Ryan''s notes re. China QuotaThis will help hold prices firm going forward...
Ryan's Notes Today:
Clarification on China Mo export quota
China's Ministry of Commerce reportedly plans to cut the 2008 export quota on all moly products to 26,300 mt of Mo, sources say. This is a 21.7% cut from the annualized quota for 2007 of 33,600 mt (Mo). China instituted a quota for July- December 2007 of 12,800 mt (Mo) of moly oxide and ferromoly and 4,000 mt (Mo) of moly chemicals and moly metal. In 2006, China exported 34,700 mt of moly (27,400 mt of moly oxide and FeMo and 7,300 mt of moly chemicals and metals). The proposed 2008 quota, therefore, is 24% lower than actual exports in 2006. This year, market sources expect China's exports to rise marginally to 35,200 mt (28,100 mt of moly oxide and FeMo and 7,100 mt of moly chemicals and metals), based on the quota and data for the first six months of the year. If the second-half year quotas are strictly enforced, sources say, exports in November and December will have to be significantly reduced because exports during July, August and September were at a higher monthly rate than the quota level of 2,133 mt for moly oxide and FeMo and 667 mt for moly metal and chemicals.