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Cost going up and supply coming down.

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Cost going up and supply coming down.

China APT exports rise to $238-240 fob on stronger yuan

Shanghai 07 July 2010 05:34

Chineseammoniumparatungstate(APT) exportprices roseby $3-4 per mtu this week on a strongeryuan,backedby higher pricesfor

concentrateand domesticAPT. APT export prices have climbed to $238-240 per mtu fob China after staying at $235-236 fob for over a month. “Yuan appreciation is the main reason for us to lift prices,” said a trader in Beijing, adding that the yuan has fallen against the dollar by 0.06 yuan from mid-June.

This means that export costs for the trader have increased by 15.8 yuan ($2.5) per mtu, he added. An exporterin Jiangxi,a major source of China’s tungsten, agreed, saying that his company had concluded a deal to Europe at $240 fob. “Demand is better than the same period in previous years, as far as I know. Many converters in the Europe are still maintaining some productionduringthe summerholidaydue to low inventoryafter last year’s financial crisis,” said the Beijing trader.

Still-rising tungsten concentrate and domestic APT prices also contributed to the firm APT export prices. ‘We raised our July concentrate offer by 1,000 yuan from June to 83,000 yuan [per tonne),” said a source at Jiangxi Tungsten Industry Group,

adding that its mines, which were shut in mid-June on heavy rains, have resumed production. Tungsten concentrate was trading at 83,()()().84,5oo yuan per tonne on Wednesday, up ~1,OOO yuan from last week. “I think concentrate prices are unlikely to fall in the near term as supply is not sufficient, and demand from APT is solid,” said a ferro-tungsten

producer in Hunan. Prices of domestic APT were at 129,000-130,000 yuan per tonne, up 1,000-2,000 yuan from early June, said an analyst in Beijing. “Many ferro-tungsten producers have switched to produce APT recently, as many downstream hard alloys producers still have a lot of orders. The ferro-tungsten market is very poor in line with the current weak steel market,” said the ferro-tungsten producer.

The producer is also set to produce APT as soon as they finish maintenance. “Ferro-tungsten market is quiet, both at home and abroad. We raised our offers to $34 [per kg} cif due to higher concentrate prices and yuan appreciation, but could not attract any buying,” said a producer in Jiangxi. Export ferro-tungsten prices were last at $31-33.5 per kg fob China, with no deals reported this week.