Thursday, June 5, 2008

Mongolia may overtake China as main moly supplier to Japan

Japanese customs data showed that Mongolia could soon overtake China as Asia's largest molybdenum oxide supplier to Japan. According to the data Mongolia exported 216 tonne of moly oxide to Japan over January to April 2008, almost matching China's exports of 220 million tonne. In comparison, while China exported 520 tones to Japan over January to April 2007, Mongolia exported only 50 tonne over the same period.

Japan, however only started importing moly oxide from Mongolia in January 2007 and Mongolia only stepped up exports to Japan in late 2007, shipping 54 tonnes in November, 36 tonnes in December, 54 tonnes in January 2008, 72 tonnes in February, 54 tonnes in March and 36 tonnes in April.

Increased Mongolian presence in the Japanese market follows the launch of commercial moly oxide production by Mongolia's mining giant Erdenet Mining in January 2007.

A Japanese consumer, who purchased moly oxide from Erdenet said that the company had a major competitive advantage over other Asian producers as it had its own supply of moly concentrate feedstock needed to produce moly oxide.

As many Chinese and South Korean moly oxide producers import moly concentrate to produce moly oxide, their output depends on concentrate availability, which has tightened this year. Meanwhile, Japanese market sources said that if Erdenet bagged an annual supply contract with steelmakers or trading houses in Japan, Mongolia could easily overtake China as Japan's main Asian moly oxide supplier.

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