www.MetalFirst.Com 2007-Jan-11

The Chinese government is considering imposing quotas on exports of molybdenum, Chinese FeMo and Mo oxide export company MME Resources Ltd told to MF.

The National Development and Reform Commission (NDRC), China's top industry regulator, held a meeting Tuesday to discuss when and how to implement quotas, industry sources said. NDRC officials declined to comment.

Exporters expect the new system to be introduced sometime this year.

A quota system would give the Chinese government greater control over the amount of molybdenum that leaves the country, in line with its widely reported desire to increase regulation of exports of minor metals and alloys.

The quotas could have a bigger impact on exports than the government's recent decision to introduce licenses for ferromolybdenum exports, market participants said.

"The application (for licenses) is simple, and as far as I know all companies in the export market will have no problem obtaining a license," an exporter in northeastern China's Liaoning province said.

"It's just a procedure, and no one's exports will be stopped," MME said. "That's probably why the government thinks it needs to introduce quotas if it is to curb molybdenum exports, just like it's done in tungsten."

China exports about 20,000 tonnes of ferromolybdenum and about the same amount of molybdic oxide per year.

Export prices for Chinese ferromolybdenum have risen to $57.50 to $58 a kilogram f.o.b. currently from $56.50 to $57.50 in late December, traders said, and MME have closed offer in this week. Molybdenum concentrate is selling at 3,650 to 3,700 yuan ($468 to $474) a tonne in China, up 3 percent from last week.