Thompson Creek Metals (Blue Pearl Mng)

Molybdenum Surplus Creation and Price Inflation

Wed, Jun 9, 2010
By Michael Montgomery—Exclusive to Moly Investing News
 
Over the past month, metal mining company shares have been falling on fears of a slowed recovery coming from Asia. While consumption of steel is up over the abysmal economy in 2009, some analysts have warned that it might not meet up to the double digit increases predicted in the first quarter. This uncertainty may have played a role in the withdrawal of Russian molybdenum major, Strikeforce Mining, from its IPO on the Hong Kong market.

However, the signs of a slowdown in Asia may just be an overreaction in a market that is more risk-averse then ever due to the global economic downturn. It doesn’t matter whether or not it’s an overreaction or speculation, share prices are falling. Last week’s article on Moly Investing News dealt with this same subject, however, questions still remain. With China’s control of worldwide molybdenum inventories, new data on steel demand and iron ore contracts, the importance of a Chinese slowdown has absolute power over moly markets.

While steel demand has fallen only slightly since early estimates predicted 6 to 10 percent growth in 2010, some Chinese steel manufacturers have defaulted on iron ore contacts, or put them off until June. This was a cause for concern from analysts around the globe, warnings were issued and investors withdrew from the market causing shares to fall. However, new data shows that some Chinese firms put off contacts till June to influence the price of those contracts.

“Analyst Jeffrey Landsberg said some transactions may have been delayed late last month to affect quarterly contract prices. Mr Landsberg said prices of high quality ore fell 24% from US$164 a tonne FOB to US$125 in less than a month,” reports Sam Collyer, for Lloyd’s List.

This manipulation of the contract price may account for some of the slowdown in steel mills not purely related to demand for the final product. This also may be a factor later in the third quarter as some steel companies plan to cut production. “Chinese steelmakers are likely to cut production in the third quarter because of ‘weak’ demand from auto and appliance makers, according to the nation’s second- biggest mill… Many steelmakers will cut production or carry out maintenance in the third quarter,” according to Helen Yuan, of Bloomberg.

The cost of iron ore contacts are highest in the third quarter prompting milling operations to save costs, perform maintenance, and raise the cost of steel due to the cut in production. However, the large steel mills in China will likely honor their third quarter contracts.

This drop in predicted demand from the automotive and appliance industries, and the drop in production of steel may affect the cost of molybdenum. However, Chinese firms have been buying up all of the molybdenum they can get their hands on, building massive inventories that may be artificially inflating the price of moly.

“The incipient recovery of molybdenum prices observed during 2Q 09 does not respond to a true increase in consumption… the prominent role played by China in the molybdenum market, in which it went from being the primary global producer in 2008, with exports of 25 million pounds, to becoming a net importer in 1H09, acquiring 35 million pounds from Western operations and absorbing all the excess stock in the rest of the world,” according to a press release, from Molyexp.

While Chinese firms are continuing to buy excess surpluses of molybdenum worldwide, and funding mining operations, the country is not using the entire surplus, just steadily building upon it. Instead they may be waiting for a time when molybdenum goes back up to its 2008 levels of $30 so that they can reduce the cost of steel production. This does however inflate the true cost of molybdenum worldwide, which is good for mining companies only so long as the Chinese are still buying.


http://resourceinvestingnews.com/...creation-and-price-inflation.html  

Appetite for China's exports strong despite Europe's woes

Aaron Back, Liu Li and Esther Fung
From: Dow Jones Newswires June 10, 2010
http://www.theaustralian.com.au/business/markets/...926-1225877993931  

Steelmakers may cut production on weak demand

By Helen Yuan (China Daily)
Updated: 2010-06-09 09:49
http://www.chinadaily.com.cn/bizchina/2010-06/09/content_9953757.htm  

Molybdenum Oxide Price
As of June 10, 2010 - US$ 13.75
www.rocamines.com  

http://www.basemetals.com/news/...l.aspx?GUID=210061015052743&V=0  

...halt output on weaker conc prices
Hong Kong (Platts)--14Jun2010/309 am EDT/709 GMT
http://www.platts.com/...path=RSSFeed/HeadlineNews/Metals/7657960.xml  

Monday June 14, 2010 02:14:10 PM GMT
http://www.forexyard.com/en/news/...r-way-2010-06-14T101414Z-UPDATE-3  

European molybdenum prices stage rally
SÃO PAULO (Metal-Pages) 15-Jun-2010.
European molybdenum prices have staged something of a revival on tighter availability of material with renewed interest from traders, Chinese buyers and end-consumers all being attributed to the development.
...
http://www.metal-pages.com/news/story/47356/  

As of June 15, 2010
http://www.thompsoncreekmetals.com/s/Home.asp  

Metal price:
Molybdenum Roasted Concentrates (Oxide) Mo 57% - European Union  
Date 2010-06-15

Change  +7.12%

http://www.metal-pages.com/metalprices/molybdenum/  

Updated:  New York, Jun 16, 08:56

14.50 Can$
+3,571%

http://www.bloomberg.com/apps/quote?ticker=mbmoeuox%3Aind  

 

SÃO PAULO (Metal-Pages) 16-Jun-2010.
Molybdenum prices could return to the $18-19/lb by the end of the year, though the short term outlook is for prices to remain between $14-15/lb analysts at New York-based CPM say.
...
http://www.metal-pages.com/news/story/47387/  

Russia’s stainless steel consumption up 63.7 percent in Q1

Wednesday, 16 June 2010 03:59:02

According to the Russian Special Steel and Alloys Consumers and Suppliers Association (Spetsstal), the Russian stainless steel market is actively rebounding, with the country's consumption of the main stainless steel products increasing in Q1 2010 by 63.7 percent year on year to more than 58,300 mt.  

According to Spetsstal's forecasts, in 2010 the consumption of stainless steel in Russia will increase by more than 25 percent year on year, exceeding 240,000 mt. In 2009, Russia's stainless steel consumption showed a decline of 36.2 percent year on year to 191,800 mt.

In the first quarter of this year Russia's output of stainless steel increased by 89.4 percent to 24,956 mt compared to the same period last year.

http://www.steelorbis.com/steel-news/latest-news/...-in-q1-537726.htm  

As of June 17, 2010 - US$ 14.90

http://www.rocamines.com/s/Home.asp  

Chinese miners active globally to feed economic growth at home

By: Keith Campbell
18th June 2010

http://www.miningweekly.com/article/...omic-growth-at-home-2010-06-18  

Gordon G. Chang, 06.16.10, 12:38 PM EDT
http://www.forbes.com/2010/06/16/...chang.html?boxes=Homepagechannels  

As of June 18, 2010
http://www.thompsoncreekmetals.com/s/Home.asp  

Moly oxide prices will be lower in H2, Graell says
São Paulo 16 June 2010 16:53

The average price of molybdic oxide in the second half of the year will be lower than the first half in a market that will remain volatile because of problems in the eurozone, according to John Graell, ceo of Chile’s molybdenum converter Molymet. “In the first half we will probably have an average price of around $15 per lb, and I think in the second half the average will be lower,” Graell told MB. The average price will not be “much lower” than the first half, he said, though it will continue to suffer from the volatility that has been present in the molybdenum market for the last several months, he said. At the start of January, drummed molybdic oxide prices were between $13 and $14 per lb.
...
http://www.metalbulletin.com/Article/2596775/...n-H2-Graell-says.html  

Das liegt zwischen den Angaben von Molymet und CPM, und stellt daher wohl den realistischsten Wert dar.
Es ist naheliegend, dass Molymet als Weltmarktführer gerne eine schlechtere Prognose abgibt, um sich viele potentielle Konkurrenten vom Leibe zu halten...  
http://www.ad-hoc-news.de/...at-bbb-outlook-stable--/de/News/21404443  

Thompson Creek Metals
Symbol: TCM-T  

Barry Schwarrtz:
PAST TOP PICK 9.820  (A Top Pick Nov 10/09. down 26.15%.)
"Dropped because of a big worry of a slowdown in China. A lot of value in this company with $5 a share in cash."
2010-06-14

http://www.stockchase.com/...--slq-ID-slv-Thompson--Creek--Metals.php  

Damit sich videomart hier nicht andauend mit sich selbst unterhalten muss    : 

Zürich (aktiencheck.de AG) -

Brian MacArthur, Analyst der UBS, stuft die Aktie von Thompson Creek (ISIN CA8847681027/ WKN A0MR6Q) von "neutral" auf "buy" hoch. Das Kursziel werde weiterhin bei 15 CAD (Kanadischer Dollar) gesehen. (21.06.2010/ac/a/u)

Dongruss

Thompson Creek rules out takeover, still seeks acquisition

SÃO PAULO (Metal-Pages) 21-Jun-2010.
Thompson Creek CEO Kevin Loughrey is not ruling the possibility that his company may become a takeover target because of its high cash per share ratio.
During a video interview with Business News Network (BNN) posted on Thompson Creek's website, it was suggested to Loughrey that cash per share running to $3.40 a share would make his company a takeover target.
...
http://www.metal-pages.com/news/story/47464/  

Tuesday June 22, 2010 10:42:11 PM GMT
http://www.forexyard.com/en/news/...-rise-2010-06-22T114222Z-UPDATE-1  

...to Pullback after Yesterday's 2.39% Rise (TC)

Written on Tue, 06/22/2010 - 4:48am By Chip Brian

Thompson Creek Metals (NYSE:TC) traded in a range yesterday that spanned from a low of $10.14 to a high of $10.86. Yesterday, the shares gained 2.39%, which took the trading range above the 3-day high of $10.14 on volume of 2.5 million shares.
Shares of Thompson Creek Metals should find initial resistance at their 50-day moving average (MA) of $11.04 and further resistance at their 200-day MA of $12.14. Look for these MAs to provide support for a short-term pullback in the shares.
SmarTrend is bullish on shares of Thompson Creek Metals and our subscribers were alerted to Buy on June 16, 2010 at $9.90. The stock has risen 3.7% since the alert was issued.
SmarTrend has the shares in an Uptrend and expects the share price to pullback toward the $10.14 support level. Afterwards, we expect it to move upward with its peers in the SmarTrend Industrial Metals & Minerals industry.

http://www.mysmartrend.com/news-briefs/news-watch/...days-239-rise-tc