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Minor Metals Bimonthly Review in China This bimonthly review on China's minor metals market provides you with the China's domestic situation of some minor metals, say ,magnesium,tungsten,antimony, molybdenum,cobalt,cadmium,bismuth, indium ,etc., as well as relevant analysis and forecast . Statistics of exports,imports and outputs ,and the policy and regulation are also included. To know China's minor metals market, please come to see our pages . March/April, 1998

Antimony

Output of antimony in China, in Feb. and Mar., totalled 8354t and 5202t respectively, which inched up,in turn, by 38% and 14% or by 2281t and 637t from the same period of last year. In the first quarter, 18689t of antimony got yielded, indicating 12% up from 2044t of the same period of last year. Easily concluded from data concerned, domestic producers ,while antimony run at very low level on markets at home and abroad, had failed to take positively flexible means , but had still maintained high capacity, that such situation exerted pressure on antimony price was profoundly expected. Hereby are the data, related to antimony trade, exports and imports of antimony in the first quarter unit:t Q1 in 1998 Q1 in 1997 exports imports net exports exports imports net exports concentrate 480 1323 -843 1231 3213 -1982 oxide 6715 135 6580 7818 75 7743 sulphide 3899 2280 1619 2866 3198 -332 unwrought scrap 6826 47 6779 7634 0 7634 powder wrought 861 616 245 321 476 -155 Just as illustrated above, exports of antimony is on the increase ,though there are a number of smuggled antimony involved. By now, exists heavy selling from Chinese producers, but few buyers stage on the markets ,as a result, antimony market, characteristic of that bumper supply from China, faces weak demand. Antimony went up and down in price from March to April, whenever price rose, more selling from domestic producers turned up. For the present , are not drastically solved some questions, such as antimony production structure and export quotation etc. Accordingly, much time is needed for antimony rebounds by a large margin. Recently, it will consolidate at a low level. It is said that, in Hunan province where antimony sectors are densely located, Antimony Industry Association is set up. The association doesn't depend on government but on self-discipline, loosely organized and composed of main producers. If Hunan Province, to some extent, does well as per this sector, then national antimony industry will be benefited greatly.Besides,secretariate of Chinese Antimony Association ,on behalf of producer's interests throughout China,is doing its best to submit the urgent questions,which producers are facing by now,to the state Council and concerned authorities.State Economic Trade Committee , for the present, is making a related investigation, and some regulations will be publicized soon.

Bismuth

Different from international market, so far as bismuth market is concerned,price steadily went up during both March and April . Hereby is quotation posted on means of production markets as for 1# bismuth:65000-72000yuan/t at the early March;68000- 72000yuan/t by the late March and the early April;and 70000-73000yuan/t in the late April .On the other hand,ex-factory from main producers in China is also available herewith:70000- 78000yuan/t in March,5000yuan/t up from in Jan; 72000- 80000yuan/t in April,also marking 5000 yuan/t up from Feb. .Meanwhile,ex-factory of concentrate closed at 37000yuan/t in March ,and was up to 40000yuan/t in April,which increased by 3000- 4000yuan/t compared with that in Jan and Feb.However,in April,ex-factory as per 1# bismuth dropped little by little.On the contrary, bismuth concentrate went up steadily in ex-factory. Such a trend ,characteristic of inching up in price,got attributed to more and more exports.The data from the Customs revealed that exports ,with unwrought bismuth (scrap and powder included),amounted to 118. 6t and 233.3t in Feb. and Mar. respectively.Furthermore,the figure is still being enlarged by now.From Jan to Mar., 421.5t of unwrought bismuth had got exported, which marked 19.1% up from the same period of last year. Basically,bismuth price on international market, to great extent , depend on export from China. In Jan. , exports of unwrought bismuth ended at less than 70t. Therefore, international market saw a rise from Feb. to Mar.. At the same time, domestic market also responded to this trend. Up to Feb. to Mar., exports of unwrought bismuth was more than 100t ,as a result, price declined on international market. By now, domestic market hasn't dropped off, though, room for further rise will be limited. Consequently, to bring quantity of export and rhythm under control is important for steady markets at home and abroad.

Cadmium

Price continued to decline in March and April in domestic market ,with monthly average dropped off by 500yuan/t. Ex-factory quotations in Zhuzhou Smelter and Huludao Zinc Plant are as follows: quotation from main producers in China unit:yuan/t Jan Feb. Mar Apr. average from Jan to Apr. Zhuzhou 13000 11500 10700 10300 11375 Huludao 13000 13000 10500 10500 11750 For the present, final statistics of output in 1997 isn't available .It is estimated that the figure will outweigh that in 1996, which may be close to 2000t. Therefore, domestic output is sufficient to meet national demand. In China, Ni-Cd battery industry exists on the ascendant ,and regulations, as per environmental protection, mainly put emphasis on mercury, with Ni- Cd battery excluded. Accordingly, consumption for cadmium increases year by year, but slower at speed than for Ni- MH and alkali-manganese batteries. Cadmium trade in Q1 in 1997 in 1998 difference % quantity sum quantity sum quantity sum (t) (0,000US$) (t) (0,000US$) import: unwrought scrap 0.06 0.02 100.12 11.15 1667.67 557.5 wrought 237.98 86.17 115.39 145.50 -51.51 68.85 Ni-Cd battery 3458.58 2469.31 4295.94 2741.43 24.21 11.02 export unwrought scrap 1.0 0.31 100.00 14.13 99 44.58 wrought 86.55 20.17 - - - - Ni-Cd battery 4288.35 3572.08 5286.99 4409.09 23.29 23.43 Cadmium comes mainly from several large- scaled producers, such as Huludao Zinc Plant and Zhuzhou Smelter. Based on estimation, there is no evidence that output of zinc in these enterprises will drop off. As a result, cadmium, a byproduct of zinc production, will also chalk up in output. Simultaneously, influenced by Southeast Asian turmoil, cadmium ingot ,concerning export, is confronted with heavy pressure, while imports maintains at a certain level. Therefore, oversupply continues to turn up on domestic market. However, present price has plunged through production cost, it is safe to say that more room for cadmium to decline is substantially limited.

Cobalt

In March and April, cobalt kept stable. From ex-factory prospect, cobalt maintained at 600000- 660000yuan/t, while ingot fluctuated from 400000yuan/t to 440000yuan/t. cobalt trade in March in March from Jan to Mar in March from Jan to Mar concentrate t 0 60.854 - - US$ 0 1445516 - - oxide and hydroxide t 8.496 12.58 3.214 66.814 US$ 225027 27794 132055 494484 chloride t 3.128 4.157 - - US$ 62238 20813 - - nitrate t 0.58 1.668 - - US$ 3645 15067 - - matte, unwrought and scrap t 28.562 55.574 1.7 5.1 US$ 411466 739202 108154 325230 wrought t 1.034 7.783 0.075 0.475 US$ 74520 399171 4698 46989 From above,it is drawn that cobalt products, with the exception of oxide and hydroxide,revealed more import than export. This situation attributed to relative shortage of cobalt resources.Meanwhile,domestic producers,when cobalt was badly demanded in the past, failed to properly touch with their old customers, which made an opportunity of importing cobalt.

Indium

Domestic market ,furthermore,ran in the same way as international market did. By now, oversupply and weak price turn up. In China, 30t of indium is yielded annually, while consumption only stands at 2t. Recently ,especially in the past two years, indium, supported by robust demand, is strong in price. Under such conditions, domestic Pb-Zn producers, equipped with recovering lines for indium, start to step up their production .Liuzhou Huaxi Group, based on abundant resources of indium-rich ores in Guangxi, have completed a processing circle, with the capacity of 41t of indium. Now, the line is just under trial production. It is said that, in 1998, the output will amount to 10t, and the circle will come on full stream following the regular trial production. China is a large-scaled exporter country as for indium, while Japan acts an important importer from China. However, impacted by Asian crisis ,imports of indium in Japan dropped off sharply. Domestic market, in tandem with international one, also declined. In April, average ex- factory closed at 2500yuan/kg, lower than 2800yuan/kg in both Feb. and Mar. From here, we conclude that Chinese indium industry can't produce an cushioning effect , facing price fluctuation, unless it takes into account the transformation from resource advantage into technological superiority.

Magnesium

Into March, magnesium price, at home and abroad , remains unchanged basically. Magnesium, delivered home, closes at 19000- 20000yuan/t .According to incomplete statistics from Chinese Magnesium Industry Association and experts concerned, output of primary magnesium in 1997 was 90 thousand tons, up 17000t from 73000 of the year 1996. By now ,China has equipped with the capacity of 120000t/a. Based on the statistics from the Customs, in the first quarter of this year, exports of unwrought magnesium, graded at 99.8% at least, reached 18. 3 thousand tons, up 48.8% from 12.3 thousand tons of last year. This situation reflects the rise in magnesium output. On the other hand ,exports of wrought magnesium magnesium product, at the same period, only ended at 265.7t and 84.0t respectively, down 42. 5% and 61% in turn .Therfore, China still needs to make unremitting efforts in the light of both output and export of magnesium semis. It is well known that low-level repeating construction, existing in the magnesium sector in China, is the main factor which leaves Chinese magnesium industry in a dilemma. Accordingly, a sharp increase in export of primary magnesium appears in recent years--- from 33. 6 thousand tons in 1995 to 37.4 thousand tons in 1996, and further to 60.4 thousand tons in 1997. Such a blind export faced anti-dumping tax, set forth by importer countries. In a word, magnesium industry in China can't get rid of difficulites with which it got confronted, unless it takes some measures, which include improving quality of product, re-adjusting product structure ,and managing export in a standard way. It is predicted, recently, that Chinese magnesium industry will stand in a awkward position, and FOB of primary magnesium remains unchanged to a great extent.

Molybdenum

Effected by international market, China imported more molybdenum. The data, related to molybdenum sector and released by former CNNC, is as flows: molybdenum product trade(unit:t) 1997 1998 in Jan in Feb. in Mar in Jan in Feb. in Mar molybdenum oxide 1688 1967 2139 1057 858 1216 ferromolybdenum 1498 1820 1688 2075 2134 2894 molybdenum output(unit:t) in 1997 in 1998 in Jan in Feb. in Mar in Jan in Feb. in Mar 2425.3 2345.6 2774.2 2624 2637 3397 It is estimated that both output and export of molybdenum, in April ,will maintain the current high-level, and so does the price. In the near future, demand for molybdenum in western countries and output of by-product molybdenum exist unchanged. Effected by high price ,more molybdenum from related mines may be produced. Meanwhile, USA, a country dominating international molybdenum market, will, to some extent , cut off its production. Therefore, demand and supply in western countries depend on export from China.

Palladium

In China,Most of palladium recovers from used chemical catalyst and scraps of electric appliance, while a few of them, produced by Jinchuan Nonferrous Metals Company, is primary. As for recycled palladium, related enterprises are only equipped with the capacity of several hundred kilograms each year. By now, domestic price has gotten onto the same track as the international does, however, it always lags behind international price. For the present, price climbs up to 100, 000yuan/kg from 70,000yuan/t at the early March. Based on statistics by customs, from Jan to Mar, only 69kg of unwrough palladium and powder got imported, while exports amounted to 973.7kg, concretly speaking, 964.9kg of them is unwrough palladium and powder,8.8kg belongs to plate and foil. International market, to a great extent, is controlled by Russia. Anyway ,basic pattern in 1998, which supply falls short of demand, will be maintained.It is forecasted that palladium price, in the coming two months , may close at 90,000yuan/kg.

Platinum

Just as palladium sector, platinum is mainly from precious metals producers on a small scale. It is reported that a new platinum -recovering plant,located in Fushun city, Liaoning Province, will be completed.Such a event will almost put an end to small-scaled production structure,and promote the further development of platinum industry in China. Domestic market follows international one, by now, platinum price from 110,000yuan/kg in March chalks up to 130,000yuan/t. Trade data,released by customs and dated from Jan to Mar, is as follows: import:463.9kg of which unwrought: 115.2kg plate,foil: 148.3kg other else: 200.4kg export: 5kg of plate and foil in March It is predicted that domestic price will finish at 110, 000- 125 ,000 yuan/kg.

Tungsten

Domestic market kept quiet in both March and April, with Prices of main products little changed. Taking for example the ex- factory from main producers. In both March and April, concentrate of wolframite concentrate closed at 19000-20000yuan/t, which indicated a steady rise compared with that in both Jan and Feb., and APT finished at 41000 -42000yuan/t, while ex-factory for grade one and grade two tungsten oxides ended at 51000-52000yuan/t and 49000- 51000yuan/t respectively ,which all showed improvement. It is safe to say that current situation, existing in tungsten market in China, reflects, to some extent, the less optimistic conditions in economy. From January to April, industrial production increases by 7. 9% compared with that in the same period of last year. However, owing to relatively sluggish demand and weak export, the actual growth rate drops by 3.5%. Tungsten trade from Feb. to Mar in 1998 unit:t Import in Feb. in Mar from Feb. to Mar difference % tungsten ore and concentrate 527.6 9.9 745.0 135.5 tungsten oxide 0 0 2.9 383.3 APT 0 0 - - ferrotungsten 0 0 0.5 - tungsten powder e e e - tungsten filament 3.9 5.2 13.2 -39.7 export in Feb. in Mar from Feb. to Mar difference % tungsten ore and concentrate 0 0 60.0 -82.4 tungsten oxide 147.5 290.0 713.5 276.5 APT 1065.0 1335.0 1371.0 -9.5 ferrotungsten 507.2 621.0 1451.3 1530.7 tungsten powder 152.5 61.4 276.9 85.0 tungsten filament 0.6 8.5 19.0 -2.1 e:no more than 100kg From aforesaid data,released by customs,it indicates that APT, an important export product, dropped off in export by 9.5% from Jan to Mar compared to the same period of last year.Two factors resulted in such trend, that is, the softening price on international market for the present, and the hampered export. Further details, related to weak sentiment and flat turnover as per tungsten market, need investigating, though, it is affirmative that, in the coming two months, there is little hope for tungsten market at home and abroad to turn for the better. In other words, correction or consolidation holds sway.

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