Analyses of molybdenum concentrate output in Henan province
2012-12-11 11:20:23 【Print】
The following is a brief synopsis of the report. Your access is restricted as it is a subscription based service.
Please contact us for a subscription.
Please contact us for a subscription.
BEIJING (Asian Metal) 11 Dec 2012 - In Henan, molybdenum ore reserves are mainly distributed in East Qinling - Dabie Mountain Area with retained resources of molybdenum ore mainly gathered in Luoyang. Henan is abundant with molybdenum well known even in the world, with an annual production ranking first nationally.
Analyses of molybdenum concentrate output in Henan in past five years
Up to the end of 2011, Henan contains 4.837 million tons of total identified molybdenum ore resources, accounting for 50% of the reserve nationwide, and 4.549 million tons of retained resources of the mineral. Molybdenum concentrate output in Henan accounts for about 50% of total production nationally, and accounts for above 15% of the output worldwide.
Seen from the above chart, molybdenum concentrate output increased sharply from 2007 to 2009 by 66.58%, 22.40% and 26.09% respectively. This attaches great importance with rising price and exports of the material. Molybdenum concentrate price reached RMB4,600/mtu in May, 2007, higher than twice of the mining cost. Many mines expanded production and explored some low-grade ore motivated by high profit. The price plunged when the financial crisis occured in September, 2009 as some mines were closed due to deficit in Henan, and since then the output has stabilized.
In 2011, molybdenum concentrate output recorded 116,776t in Henan, up by 4.95% from that in 2010, while the growth a year ago was only 0.4%. Outputs were extremely slim during 2009-2011, especially during 2009-2010 while the output barely saw an uptick. This was mainly due to production control from the nation and unwillingness in expanding capacity from mines as a result of lull downstream demand given impacts from financial crises.
Molybdenum concentrate output in Henan in 2012
There are four super large deposits in Henan, including Luanchuan Sandaozhuang, Henan, Nannihu, Shangfanggou Molybdenum and Ruyang Donggou Molybdenum Deposit. The top three deposits all locate in Luanchuan County, Luoyang, which is called the capital of molybdenum as it is the largest polymetallic ore place.
According to the chart above, almost all the large molybdenum mines are state owned enterprises, indicating that state owned enterprises dominate production of molybdenum concentrate. These mines hold high grade resource and can be mined with low cost. Thus, production of molybdenum keeps stable in spite of low price of molybdenum concentrate in the poor market.
Output of molybdenum concentrate keeps stable in general in Henan this year, which benefited from the support from state owned molybdenum enterprises. The production of Luoyang Molybdenum and Henan Coal and Chemical Group amounts to the 80% of the total production. The production in these enterprise took little hit by the declining prices and keeps normal with the macro controlling from the government.
From the above chart, we can see that the output of molybdenum kept low in Q1 as some mines halted production due to holiday and the bad weather. In Q2, some mines have resumed production and produced normally. In Q3, the production fell as the declining price of molybdenum concentrate led to some mines halting with due to no margins. The output of molybdenum concentrates totaled 93,087t in Henan in the first ten months, down by 2.06% y-o-y. That in October amounted to 8,786t, down by 14.49% y-o-y. Over 60% of medium and large molybdenum mines halted production, among which most were forced to closure due to high costs. The cost stood at RMB1,800/mtu in molybdenum concentration production, according to a mine owner. They would mine again only if the market price is higher than the cost.
Analyses of molybdenum concentrate output in Henan in past five years
Up to the end of 2011, Henan contains 4.837 million tons of total identified molybdenum ore resources, accounting for 50% of the reserve nationwide, and 4.549 million tons of retained resources of the mineral. Molybdenum concentrate output in Henan accounts for about 50% of total production nationally, and accounts for above 15% of the output worldwide.
Seen from the above chart, molybdenum concentrate output increased sharply from 2007 to 2009 by 66.58%, 22.40% and 26.09% respectively. This attaches great importance with rising price and exports of the material. Molybdenum concentrate price reached RMB4,600/mtu in May, 2007, higher than twice of the mining cost. Many mines expanded production and explored some low-grade ore motivated by high profit. The price plunged when the financial crisis occured in September, 2009 as some mines were closed due to deficit in Henan, and since then the output has stabilized.
In 2011, molybdenum concentrate output recorded 116,776t in Henan, up by 4.95% from that in 2010, while the growth a year ago was only 0.4%. Outputs were extremely slim during 2009-2011, especially during 2009-2010 while the output barely saw an uptick. This was mainly due to production control from the nation and unwillingness in expanding capacity from mines as a result of lull downstream demand given impacts from financial crises.
Molybdenum concentrate output in Henan in 2012
There are four super large deposits in Henan, including Luanchuan Sandaozhuang, Henan, Nannihu, Shangfanggou Molybdenum and Ruyang Donggou Molybdenum Deposit. The top three deposits all locate in Luanchuan County, Luoyang, which is called the capital of molybdenum as it is the largest polymetallic ore place.
According to the chart above, almost all the large molybdenum mines are state owned enterprises, indicating that state owned enterprises dominate production of molybdenum concentrate. These mines hold high grade resource and can be mined with low cost. Thus, production of molybdenum keeps stable in spite of low price of molybdenum concentrate in the poor market.
Output of molybdenum concentrate keeps stable in general in Henan this year, which benefited from the support from state owned molybdenum enterprises. The production of Luoyang Molybdenum and Henan Coal and Chemical Group amounts to the 80% of the total production. The production in these enterprise took little hit by the declining prices and keeps normal with the macro controlling from the government.
From the above chart, we can see that the output of molybdenum kept low in Q1 as some mines halted production due to holiday and the bad weather. In Q2, some mines have resumed production and produced normally. In Q3, the production fell as the declining price of molybdenum concentrate led to some mines halting with due to no margins. The output of molybdenum concentrates totaled 93,087t in Henan in the first ten months, down by 2.06% y-o-y. That in October amounted to 8,786t, down by 14.49% y-o-y. Over 60% of medium and large molybdenum mines halted production, among which most were forced to closure due to high costs. The cost stood at RMB1,800/mtu in molybdenum concentration production, according to a mine owner. They would mine again only if the market price is higher than the cost.
