Chinas ever changing export
situation is set to take another twist as the Ministry of
Foreign Trade and Economic Cooperation plans a new strategy for
2010 to control the exports of key industrial minerals such as
bauxite, fused alumina, magnesite, and fluorspar.
An authoritative source revealed to
IM that any company wishing to export material
next year will be tied to the amount of capital investment a
company has in China, which would rule out a number of smaller
The actual investment figure is
still under wraps as the regulations are not yet finalised, but
is expected to be substantial.
Previously, companies applying for export licences were either
listed or permitted tender by involvement. Initially,
allocations were made in line with a companys export
record, or production capacity, which was calculated by a
In this way, the list of exporters
has been kept fairly tight, although the resale and trade in
the export licences themselves was an issue for a while.
This latest move to link the size
of companies into the export system may have implications for
smaller trading and processing firms and could trigger further
consolidation in the industry.
There have already been moves in
upstream sectors of the mining industry, where state driven
restructuring has led to the emergence of large
This revelation tallies with
comments from Chinas Dept. of Foreign Trade, Ministry of
Commerce at IMs 8th Chinese
Industrial Minerals Conference in Qingdao in September.
Chao Ning, director of the ministry
explained that China is looking to improve exports
qualification conditions which will result in stricter
application procedures for those wishing to export minerals and
particularly processed products.
Many believed the days of strict
Chinese export policy were numbered considering its recent
clashes with the World Trade Organisation (WTO). Dan Horovitz,
partner at Holman Fenwick Willan LLP, anticipated significant
change in Chinas present export regulations with the
country not wishing to be seen confronting WTO practices.
Should the Chinese government enact the capital investment
rule, one of the most widespread and significant changes yet
will be placed on those wishing to operate and export of out
Chinese bauxite up
Traders of non-metallurgical
bauxite, used in the production of a range of refractory and
abrasive products, have reported that a shortage of raw
material within China has pushed up prices for certain grades,
despite the ongoing weak demand from the export market.
It is understood that within China
bauxite prices have risen by $28/tonne in recent weeks. For the
export market, prices have been quoted as follows for November
Bauxite, abrasive grade, FOB China: $320-350/tonne, up
Shanxi, FOB Xingang, Round kiln 87/1.8/3.20+:
$480-500/tonne, up from $420-460tonne
Shanxi, FOB Xingang, Rotary kiln 87/1.8/3.20+:
$480-500/tonne, up from $420-460/tonne
The rise in prices comes in spite
of ongoing depressed market conditions, especially in the
export market, underpinned by the collapse in global steel
markets earlier in the year which has dramatically reduced
demand for refractory products.
Some refractory grades (Shanxi, FOB
Xingang, Round kiln 85/2.0/3.15; Shanxi, FOB Xingang, Rotary
kiln 85/1.8/3.15) and Guyana welding grades have remained
stable at $400-420/tonne and $450-510 tonne, respectively.
Some brown fused alumina (BFA)
prices have edged up in line with higher bauxite prices.
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