NATC opposed to DLA tungsten release proposal

BEIJING (Asian Metal) 11 Aug 05 – U.S.Asian Metal Copyright “When they find the price would not go the way they expected, or the proposal sail through, that will create chaos in the market.Asian Metal Copyright DLA (Defense Logistic Agency) proposed to increase tungsten concentrate release from 5 million to 20 million pounds for next fiscal year.Asian Metal Copyright When DLA sells tungsten to the market, who are those that have the financial muscle to bid? The answer is, obviously not those medium and small-sized companies, but those large companies with enormous financial resources.Asian Metal Copyright The biggest western tungsten suppliers, North American Tungsten Corporation (NATC) and Almonty, are against the proposal while major users favor it.Asian Metal Copyright “When they find the price would not go the way they expected, or the proposal sail through, that will create chaos in the market.Asian Metal Copyright On this issue, Mr.Asian Metal Copyright And will they sell the material to the smaller companies at affordable price? This, I have my doubt as there is no mechanism put in place to ensure that others will be able to participate fairly and equitably.Asian Metal Copyright Stephen Leahy, the NATC President, granted an interview to Asian Metal.Asian Metal Copyright “20 million pounds of tungsten concentrate is equivalent to 13 of DLA stockpile, so it cannot support the market for long, at most three years in this case.Asian Metal Copyright

NATC believes the release will be detrimental to the market in the long run. “The price, in the short-run, will drop and release partial supply pressure off the market, but in the long run, the effect will be inimical to orderly and sustainable growth of the market,” said Mr.Asian Metal CopyrightS.Asian Metal Copyright Leahy. “20 million pounds of tungsten concentrate is equivalent to 1/3 of DLA stockpile, so it cannot support the market for long, at most three years in this case.Asian Metal Copyright”Commenting on the future market, NATC holds optimistic attitude to the market, and it thinks the price will continue to rise in the long-run.Asian Metal Copyright The market will likely be plunged into unending crisis, which will not be beneficial to all concerned, and DLA will not able to solve the attendant problems not created by it.Asian Metal CopyrightS.Asian Metal Copyright”

“However, other big companies that include Osram, Kennametal support the proposal, for they would be able to buy tungsten at cheaper prices. When DLA sells tungsten to the market, who are those that have the financial muscle to bid? The answer is, obviously not those medium and small-sized companies, but those large companies with enormous financial resources.Asian Metal Copyright If we give the market some time to adjust itself, equilibrium position between demand and supply will find its level sooner than expected, not through the influence from a government agency.Asian Metal Copyright And will they sell the material to the smaller companies at affordable price? This, I have my doubt as there is no mechanism put in place to ensure that others will be able to participate fairly and equitably.Asian Metal Copyright With around 770,000 tons ore reserve, NATC will supply about 4,000 tons tungsten concentrate per year before the other mine, MacTung, puts in production.Asian Metal Copyright”

“I would say 5 million to 8 million is more reasonable for DLA to release. This quantity will support the market to ease pressure off it in the short run and help stimulate it in the long run.Asian Metal Copyright”According to Mr.Asian Metal Copyright But with a 20 million pound worth release to the market, NATC will keep opposing the proposal.Asian Metal Copyright”“I would say 5 million to 8 million is more reasonable for DLA to release.Asian Metal Copyright”

Commenting on the future market, NATC holds optimistic attitude to the market, and it thinks the price will continue to rise in the long-run. “Look at molybdenum, the price increased many times, and the market is still booming.Asian Metal Copyright When DLA sells tungsten to the market, who are those that have the financial muscle to bid? The answer is, obviously not those medium and small-sized companies, but those large companies with enormous financial resources.Asian Metal Copyright If we give the market some time to adjust itself, equilibrium position between demand and supply will find its level sooner than expected, not through the influence from a government agency.Asian Metal Copyright “The price, in the short-run, will drop and release partial supply pressure off the market, but in the long run, the effect will be inimical to orderly and sustainable growth of the market,” said Mr.Asian Metal Copyright”

According to Mr. Leahy, the DLA proposal is already influencing the western market.Asian Metal Copyright With around 770,000 tons ore reserve, NATC will supply about 4,000 tons tungsten concentrate per year before the other mine, MacTung, puts in production.Asian Metal Copyright Consumers are holding back from purchasing and waiting for cheaper material.Asian Metal Copyright DLA Defense Logistic Agency proposed to increase tungsten concentrate release from 5 million to 20 million pounds for next fiscal year.Asian Metal Copyright “When they find the price would not go the way they expected, or the proposal sail through, that will create chaos in the market.Asian Metal Copyright Consumers are holding back from purchasing and waiting for cheaper material.Asian Metal Copyright”

NATC will soon begin to process tungsten ore from its own mine, CanTung, by the end of the month, and the first shipment will be in September. With around 770,000 tons ore reserve, NATC will supply about 4,000 tons tungsten concentrate per year before the other mine, MacTung, puts in production.Asian Metal Copyright Stephen Leahy, the NATC President, granted an interview to Asian Metal.Asian Metal Copyright