Ryan's Notes on Molybdenum
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Japanese ferromoly imports from Chile will no longer be subject to a duty now that the Japan-Chile Economic Partnership has been signed by the governments of both countries (Ryan's Notes, Oct. 2, 2006, p4). Japan imported 740 mt of FeMo from Chile in 2006, up 42% from imports of 520 mt in 2005. In 2006 imports from China fell 11% to 2,985 mt from 3,345 mt the year before. It is not clear when the duty on Chilean FeMo will officially be removed, but the Japanese Ministry of Economy, Trade and Industry expects it will be by the end of 2007.
China's government did not hike export taxes on ferroalloys on Apr. 1, as some industry sources had expected, but a spokesperson for the China Ferroalloys Industry Assn. noted that higher taxes could still be introduced later this year, especially as the relevant government ministries are discussing dates for implementation. The increased taxes introduced to date have not been enough to slow the flow of ferroalloys out of China. China exported 2,358,977 mt of ferroalloys in 2006 compared to 1,735,815 mt in 2005. The exports included: 284,410 mt (169,222 mt in 2005) of ferromanganese; 1,331,053 mt (940,997 mt) of ferrosilicon; 518,099 mt (376,601 mt) of silicomanganese; 49,181 mt (59,558 mt) of ferrochrome; 3,022 mt (21,890 mt) of silicochrome; 18,598 mt (25,132 mt) of ferromoly; 5,833 mt (6,011 mt) of ferrotungsten and 10,930 mt (3,779 mt) of ferrotitanium.
Ferromoly prices were off slightly in Europe, but steady in the US. A European mill claimed to have purchased FeMo at below $72 per kg, although traders thought prices still were $72-73 per kg. Unsolicited offers of FeMo from China have increased, but traders are leery about paying $68 per kg for material for shipment. In the US, truckload sales of FeMo were booked at $31 per lb. Oxide prices have narrowed to $28-28.50 per lb. There were some consumer inquiries for briquettes late last week. Generally, traders feel that the tone of the market remains bullish.
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Quadra Mining, owner of the Robinson copper mine in Nevada, has made an offer to buy International Molybdenum (InterMoly), owner of the Malmbjerg moly project in Greenland. InterMoly has recommended accepting the offer, which calls for one new Quadra share for every 36.22 InterMoly shares and one new Quadra share for every 99.23 InterMoly warrants. The offer values each InterMoly share at approximately 10.68 pence and each InterMoly warrant at about 3.9 pence, representing a premium of roughly 78% to the market price of an InterMoly share and a premium of about 11.3% to the market price of an InterMoly warrant at the close of business on Mar. 6, 2007.
Galahad Gold has accepted the offer in respect to the 106,666,700 InterMoly shares and 3,333,350 InterMoly warrants it owns. If the deal goes through, Galahad will own about 7.1% (6.4% fully diluted) of the issued share capital of Quadra.
Quadra is developing the Carlota copper project in Arizona and has an option on the Sierra Gorda project in Chile where it is conducting an exploration program. |
