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Chinese ferro-tungsten export prices start to rise
Chinese ferro-tungsten export prices are starting to rise as more bids come in, reflecting improving demand, said market sources. "We have received an increasing number of bids this week from other Asian countries, like Japan and Korea, and we have concluded some deals to Japan...
Five metals to undergo big price rises, tungsten included
This year marks the 30th anniversary of the famous bet between University of Maryland economist Julian Simon and Stanford biologist Paul Ehrlich involving resource scarcity. Simon, the optimist, was convinced that advances in technology, innovation, and resource substitution would lead to greater resource availability over time, and falling, inflation-adjusted resource prices. Ehrlich, the pessimist, predicted that population growth would increase global demand for natural resources and put upward pressure on their prices over time as they became increasingly more scarce. To help settle their differences, Simon and Ehrlich agreed to a famous bet about the future trend of resource prices. Here’s one account of what happened from Wired Magazine:
Ehrlich and his colleagues picked five metals that they thought would undergo big price rises: chromium, copper, nickel, tin, and tungsten. Then, on paper, they bought $200 worth of each, for a total bet of $1,000, using the prices on September 29, 1980, as an index. They designated September 29, 1990, 10 years hence, as the payoff date. If the inflation-adjusted prices of the various metals rose in the interim, Simon would pay Ehrlich the combined difference; if the prices fell, Ehrlich would pay Simon. Then they sat back and waited.
Between 1980 and 1990, the world’s population grew by more than 800 million, the largest increase in one decade in all of history. But by September 1990, without a single exception, the price of each of Ehrlich’s selected metals had fallen, and in some cases had dropped through the floor. Chrome, which had sold for $3.90 a pound in 1980, was down to $3.70 in 1990. Tin, which was $8.72 a pound in 1980, was down to $3.88 a decade later. Which is how it came to pass that in October 1990, Paul Ehrlich mailed Julian Simon a check for $576.07.
Simon and Ehrlich discussed a second bet but couldn’t agree on the terms, so Simon has gotten credit as the clear winner over Ehrlich in their debate about resource availability. However, the Simon victory has been challenged by Paul Kedrosky, who recently gave a Technology, Entertainment, Design talk about what he calls “the most important bet in history.” Here’s what Paul wrote recently about “Re-Litigating the Simon/Ehrlich Bet“:
It will surprise no-one that the bet’s payoff was highly dependent on its start date. If you started the bet any year during the 1980s Simon won eight of the ten decadal start years. During the 1990s things changed, however, with Simon the decadal winners in four start years and Ehrlich winning six. And if we extend the bet into the current decade, then Ehrlich won every start-year bet in the 2000s.
So, what does all this mean? First, and most importantly, it means Simon was right but fairly lucky. There is nothing wrong with being lucky, of course, but compulsive Simon/Ehrlich-citers need to be reminded that it is no law of nature that commodity prices (inflation-adjusted or otherwise) trend inexorably downward, even over a decade.
I responded on Carpe Diem that it should also surprise no one that a commodity bet is also highly dependent on the specific commodities chosen. In the “most important bet in history,” Ehrlich chose only the five commodities that he thought would become scarcer, but a more complete analysis of commodity scarcity over time should include more than just those five commodities, and the time periods evaluated shouldn’t be restricted to just decades the way Kedrosky updates the Simon/Ehrlich wager.
To evaluate and expand the Simon/Ehrlich bet, the chart above shows the monthly, inflation-adjusted Dow Jones-AIG Commodity Index back to January of 1934 (data here). The Dow Jones-AIG Commodity index is based on 19 physical commodities (including natural gas, live cattle, zinc, nickel, copper, silver, and cotton; see the full list here), and therefore represents a much broader basket of commodities than the five metals chosen by Ehrlich. The red line in the graph shows the statistically significant downward trend in inflation-adjusted commodity prices that started in the 1930s and continues to today.
Based on this more comprehensive analysis of a larger basket of commodities over a longer period of time, Simon was obviously more than just lucky, since the graph clearly demonstrates falling real resource prices over the last 75 years, which is exactly what Simon predicted.
Stated differently, Simon was really betting that the inflation-adjusted prices of a basket of commodity prices would have a significantly negative trend over long periods of time due to increased resource availability, and Ehrlich was alternatively suggesting that real resource prices would trend significantly upward due to population increases and demand pressures on resources. For that bet, the optimist Simon emerges as the clear winner over the pessimist Ehrlich, and it has nothing to with luck, and everything to do with the factual record of resource prices over time.
North American Tungsten stated that Cantung had approximately two years of tungsten reserves left, but, combined with its Mactung operation, the two hold 15% of the world's known tungsten.[4] Leahy is optimistic:
"We've seen the price rise from $50 a unit (22 kilograms) to $250 a unit in two and a half years... This mine started in the early 1960s and it has been taken care of quite well, but you are still dealing with very old equipment... China used to say it had an infinite amount of tungsten. Then a few years ago they said they had about 100 years supply at the current rate. Then last year at the tungsten conference [China] said they were less than 20 years and they better start looking. Their grade has been dropping as mines mature. They haven't been reinvesting. They have environmental issues, and you can't just bring a mine on in two months. Even over there it takes years. Their costs are rising, as ours are."
New new major production will likely occur before 2013 at the earliest, causing a tungsten shortage that will support higher tungsten prices," Thompson said, forecasting that prices will increase to US$300 per mtu until new production is realized after 2013. "The suspension of production from the Cantung mine will further impede available tungsten supply."
"Caveats for our long-term price forecast for APT are continued robust growth in demand for tungsten in excess of 3%, specifically from China, and limited new high-grade supply, especially from current producing countries such as China, Russia, and Australia, all of which possibilities seem unlikely in the medium term."
Haywood asserted that the lack of new production has been noted by Asian tungsten mine operators, "promoting a spate of strategic agreements, offtake agreements, and acquisitions to support new development through an input of capital. The credit crisis and associated spate of market volatility makes the involvement of joint venture partners with the ability to finance projects a near necessity."
Meanwhile, Haywood also noted a problem with the U.S. Government tungsten stockpile. In January the U.S. Geological Survey estimated that the Defense National Stockpile Center had 21,300 tonnes of tungsten concentrate on hand or 46 million pounds, a reduction from the 30,000 tonnes reported in 2003. Year end estimates are 43 million pounds in 2008.
"Industry sources suggest that at least a third (14.2 million pounds) are either contaminated or of such poor quality rendering that portion un-saleable and unwanted which leaves some 28.6 million pounds available for industrial consumption," Thompson noted.
"The congressional mandate calls for 8 million pounds to be auctioned off each year, implying that the current stock pile will be exhausted in 3.5 years or 5.3 years if the entire stockpile was high quality," he concluded.
tks my tarjet 1$ CAD
welcome aboard Dandy!!! Malaga is a GEM!!
First of all, the owners of ore mine keep the mineral on their hands and not willing to sell the materials, expecting the price may go much higher. They will not sell the materials until the price reaches the highest point, and then they can make large sum of money.
Besides, due to the upcoming Spring Festival, most of the manufactures stopped their machines and prepared the overall check and regulation. So the national total tungsten production volume is dropping greatly. With so little tungsten products in the market, no doubt the price keeps increasing.
And the Spring Festival in February is estimated to last 20 days to one month, and experts in tungsten industry believe during this period, the tungsten price will maintain a skyrocketing trend
China recently restricted the export of rare metals such as Tungsten and Molybdenum, while controlling 85% and 43% respectively of the world reserves. Tungsten in example is necessary for light bulbs, while Molybdenum is required to harden steel, thus plays as well a vital role in the construction of nuclear reactors. Many rare metals prices sky rocketed which may help understanding how critical it is to stop the USD depreciation while China not only buys the relevant metals but also acquires producing mining companies and future world class deposits from junior exploration companies in Peru, China, Australia, Chile, Canada and Mongolia
http://www.glgroup.com/News/Investment-During-A-Recession-46244.html
Summary
Yes, we are in a secular bear market. The Obama administration is taking the right steps to reinstate trust and attract foreign investments in the US markets, still the recovery will take several years. Best strategy? Bet on China's growth and bet on the continuation of the US recession thus invest in undervalued canadian mining companies which focus on industrial metals, (i.e. copper),rare metals (i.e molybdenum, tungsten) and precious metals as hedge against a rising US deficit / M3 figure.
Analysis
Rising commodity prices and shrinking supply in natural resources due to increased Chinese demand justifies the idea that China will continue to advance the Chinese industrialization and strive to extend the Chinese working middle class by another 500 million people over the next 10 years. China recently restricted the export of rare metals such as Tungsten and Molybdenum, while controlling 85% and 43% respectively of the world reserves. Tungsten in example is necessary for light bulbs, while Molybdenum is required to harden steel, thus plays as well a vital role in the construction of nuclear reactors. Many rare metals prices sky rocketed which may help understanding how critical it is to stop the USD depreciation while China not only buys the relevant metals but also acquires producing mining companies and future world class deposits from junior exploration companies in Peru, China, Australia, Chile, Canada and Mongolia. Rare metals' price appreciation is the most transparent one, but Industrial metals and energy metals such as uranium will also become less affordable, thus will eventually make it more difficult for the corresponding industries (i.e. car industry, housing market) to produce cost effective in spite of a depreciating USD which should otherwise help increasing exports, but will irrevocably make natural resources less affordable
My strategy is to bet on undervalued Canadian junior mining exploration companies with exceptional and proven management teams, meaning there are individuals who managed several times to take over an exploration company with a market cap. of CAD 25 million, identified the right properties, found inferred assets, moved inferred assets to the indicated and proven category, completed the relevant 41-101 compliant reports, produced the feasibility study, avoided dilution through either a spin-off of one property, established joint ventures, started early production through the identification of an open pit zone, obtained the approval to construct a mine from local authorities, and eventually successfully either sold the project or in the best case scenario made the CAD 25 million market cap grow to CAD 1 billion market cap range. Example would be David Lowell's team which found the Pierina gold deposit. Mrs. Catherine McLeod-Seltzer sold Arequipa Resources for CAD 1 billion to Barrick in the 90s. Rob McEwen’s accomplishments with Goldcorp were equally impressive. There are numerous "great" people who have proven that it may be not such a bad idea to identify to what companies they are associated with today. And if one looks at the underlying stock's performance they will be all impacted by the general volatility, and
may simultaneously move north or south, the share price may at times not move at all. Nevertheless, the moment they reach another stage, such as reporting that 679 million pounds of molybdenum can be moved to the proven category, these stocks will move substantially, very quickly and most definitely north. It's not a question that these stocks will move up, but when the work is done or laboratory results will be delayed or not, or if certain warrants finally expired. Therefore the short answer, if one owns 20 different companies in one asset class, and they continue to move simultaneously most of the time, one should possibly reconsider investing in the relevant the asset class all along. 2. Metals, in particular metals which are needed for China's effort to successfully have another one billion people join China's middle class. China recently announced to stop exporting rare metals. I.e. China controls 85% of the world’s Tungsten reserves and 40% of molybdenum reserves. There is little substitution for molybdenum in its major application as an alloying element in steels and cast irons. In fact, because of the availability and versatility of molybdenum, industry has sought to develop new materials that benefit from the alloying properties of the metal. Potential substitutes for molybdenum include chromium, vanadium, niobium (columbium), and boron in alloy steels; tungsten in tool steels; graphite, tungsten, and tantalum for refractory materials in high-temperature electric furnaces; and chrome-orange, cadmium-red, and organic-orange pigments for molybdenum orange.) Furthermore, foreign concerns about the unofficial inflation in the US M3 figure, and the US deficit, and the fact that gold reached just moments ago the historical mark of $1000 strongly suggest that it may be a good idea to look out for producers which may start generate profits only when relatively high production costs are outpaced. Once again, the exploration will not be able to keep up with the high demand which can be expected when even entities such as the Russian Central bank aggressively start investing in precious metals with the intention to hedge against a depreciating USD. 3. Cash. Yes, as long it is invested in currencies related to mining countries (Chile, Peru, Australia, and Canada). Otherwise, I would suggest buying quality junior miners or producers which trade in the above indicated markets. How long? It depends on the USD.”
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
This author consults with leading institutions through GLG
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We are ready to FLY !!!!!!!
Thanks KINIKI ... I continue buying this GEM. 10 bagger easy !
Serious good news! Malaga is operating on schedule. I was informed that the company is expected to receive there "medium producer licence " upgrade from Peru between late Q1 and early Q2. This key upgrade will permit Malaga to increase its tungsten production from 375 tonnes per day (tpd) to the much anticipated 500 tpd rate. In addition, Malaga is planning to publish an updated Pasto Bueno 43-101 resource report before the Company introduces itself to the Toronto market at PDAC March 7-10.
The tungsten price is steadily rising in China as well the tungsten APT European bid price has increased from US $185 MTU to $205 MTU in the last month.
2012 :The World Tungsten Market Needs More Than 90 Thousand MTs
Consumption of tungsten in hard metals/cement carbides is the largest and is expected to increase further. The global tungsten market is projected to reach 91 thousand metric tons by the year 2012.
Though tungsten demand is persistently growing owing to rapid development in national defense, civil and war industries throughout the globe, increase in supply shortage has become a major growth dampener for the distinctive metal. Prices increased sharply in recent years. End users largely depend on China, which represents over 85% of worldwide tungsten supply. The leading global producer of tungsten is China followed by Russia, Canada, Austria, Bolivia, and Portugal. China supplies a major portion of tungsten to the US. China is also the largest stockpile for tungsten in the world accounting for over 55% of world reserves. Of late, China significantly reduced exports of tungsten due to its growing domestic requirements and restrictions on exports of certain metals, which included tungsten. Therefore, growth of tungsten market depends largely on new discoveries and explorations.
Asia-Pacific (including China & Japan) represents the largest and the fastest growing tungsten market in the world and is projected to cross 45 thousand metric tons by the year 2010, as stated by Global Industry Analysts, Inc. Among end-use sectors, chemicals represent the fastest growing market for tungsten with a compounded annual rate of over 8% during the 2001-2010 analysis period, while hard metals/cement carbides end-use segment represents the largest market and is projected to reach 48 thousand metric tons by the year 2010.
Exports from China and the CIS to Japan, Western Europe and United States represent key trade flows. During the last decade, pattern of tungsten trade switched from tungsten ores and concentrates to intermediate materials such as ammonium paratungstate (APT), oxides and ferrotungsten. Low prices for tungsten spurred producers to develop and export downstream products.
As cemented tungsten carbide is satisfying changing technical demands in milling and turning operations, it is considered a key material for cutting-tool inserts. Ceramic-metallic compounds and ceramics are being produced and used as replacements for cemented tungsten carbide in order to fulfill varying market demands. Demand for more distinctive metal, tungsten, is persistently growing owing to rapid development in national defense, civil and war industries throughout the globe. However, supply-demand curve in tungsten market is not likely to widen in the upcoming years and the market is not expected to witness a continued period of severe supply shortages.
MLG.to PURE TUNGSTEN ... Production UP 232% ...link...http://www.minem.gob.pe/descripcion.php?idSector=1&idTitular=1762
TUNGSTEN Blog .....http://www.iconresources.com.au/BlogRetrieve.aspx?BlogID=419
Tungsten..news from down under...
Newcrest also announced an updated indicated and inferred resource for its O’Callaghans deposit of 78 million tonnes containing 260,000 tonnes of tungsten and 220,000 tonnes of copper.
Mr Smith later told journalists the deposit had a fair bit of importance strategically, given only 100,000 tonnes of tungsten was produced each year and 80 per cent of the market was controlled directly by China.
‘‘So they basically control the market.‘‘
It’s been declared by China as a strategic metal.
‘‘There are companies around the world who need tungsten but are finding it difficult at the moment to find access to long-term supply.’’
Mr Smith said Newcrest did not want to participate fully in the marketing of tungsten but ‘‘maybe another partner can get involved to take the tungsten from O’Callaghans off our hands’’.
He said Newcrest was confident O’Callaghans would be easy to mine and could become a substantial player in the tungsten market.Tungsten prices were rising and looked set to continue appreciating given the tight supply, he said.
Shares in Newcrest closed up 24 cents to $32.68.
Time Ex Price Change Volume Buyer Seller Markers
14:20:24 T 0.15 +0.02 2,000 79 CIBC 9 BMO Nesbitt K
14:20:24 T 0.145 +0.015 3,000 79 CIBC 7 TD Sec K
14:20:24 T 0.14 +0.01 5,000 79 CIBC 1 Anonymous K
12:44:52 T 0.13 - 15,000 85 Scotia 33 Canaccord K
11:38:50 T 0.13 - 434,000 31 Dominick 89 Raymond James K
11:38:50 T 0.13 - 20,000 31 Dominick 89 Raymond James K
11:38:50 T 0.13 - 10,000 31 Dominick 1 Anonymous K
09:35:04 T 0.125 -0.005 2,000 85 Scotia 19 Desjardins K
09:35:04 T 0.13 - 3,000 7 TD Sec 19 Desjardins KL
I think these guys bought 460k shares...D & D Securities - Home
wowwww 500k shares!!!
why Trapeze buying/selling shares?
http://www.stockwatch.com/utilit/utilit_snapsh_result.aspx
MLG undervalued!!! float gone!! somebody knows if a new conference coming?
TUNGSTEN CHART
MLG.to ALERT
LINK : http://www.infomine.com/investment/charts.aspx?c=tungsten&u=lb&x=usd#chart
Volume is better!
Some shareholders were simply giddy over rhenium drill results Wednesday, while a gold mine feasibility study garnered some attention.
Stockhouse Canadian Small and Micro-cap Stock Report for Wednesday, February 3, 2010
TORONTO (SHfn) – Some shareholders were simply giddy over rhenium drill results Wednesday, while a gold mine feasibility study garnered some attention.
Happy Creek Minerals (TSX: V.HPY, Stock Forum) shares powered 28% higher to 32 cents on Wednesday after the micro cap miner reported preliminary results of additional geochemical analyses performed on a portion of one of its drill holes from the Rateria property in British Columbia, which included 7.5 metres containing 7.2 grams per tonne (g/t) rhenium, along with 0.34% copper and 0.085% molybdenum. Rhenium is a metal primarily used in making high temperature super-alloys and catalysts. Rhenium prices are currently around US$6.25 per gram, and have recently ranged up to US$12 per gram over the past few years.
As well, shares of American Bonanza Gold (TSX: T.BZA, Stock Forum) gained 19% to 19 cents as the junior explorer announced results of its NI43-101 compliant 2010 Feasibility Study at its 100% owned Copperstone Gold Mine in Arizona. The Copperstone Gold Mine is estimated to produce on average 45,891 ounces of gold annually for the first three years, and have a capital investment payback period of 13 months. The study details a total capital cost of US$17.74 million and estimates the cash production cost to be US$415 per ounce of gold produced. The After Tax Net Present Value of the mine is US$51,291,204 and the Internal Rate of Return is 96.3% in the base case using a future gold price estimate of $962 per ounce and a 5% discount rate.
Melco China Resorts (TSX: V.MCG, Stock Forum), meanwhile, said it has entered into definitive agreements with Wisecord Holdings Limited (WHL), in which WHL will subscribe for 100 million common shares in the capital of the company at a subscription price of 15 cents a share for a total subscription price of $15 million. Melco China stock popped 110% to 21 cents.
And, Malaga (TSX: T.MLG, Stock Forum) Wednesday reported that it has found a technique to recycle the copper/silver rich mine tailings produced at its Pasto Bueno mine as a by-product during processing of tungsten ore. During the next six months, more than 5,000 tonnes of this tailing will be recycled generating more than US$2.5 million. Its shares added 11% at 15.5 cents
Investor: It is clear Malaga is the only tungsten company reporting a positive cash flow in the last twelve months, but are the other companies that are in exploration and development going to give Malaga a run for their money in the near future?
Malaga: The other companies with an interest in producing tungsten are in the exploration stages. In the very least, they are 4-5 years away before production stage. Feasibility studies, mining permits, environmental impact assessments, mine construction financing and many millions of dollars is what is necessary to get to where Malaga is today.
Investor: Is it not a touch worrisome that there are few companies operating in the tungsten business today?
Malaga: The tungsten market in the East is substantial. China has long held the position as the world's leading nation of tungsten production. The other principal tungsten producing nations are Austria, Bolivia, Canada, Peru, Portugal, Russia and Thailand. Some mines in the US and Australia that have closed in the last few decades are considering to re-open; however, as mentioned above, this will take time and many millions.
Investor: Is it a tough business with limited demand?
Malaga: As the world continues to grow, a steady increase in industrialization along with a broadening of the applications of tungsten and its products is par the course as tungsten consumption is closely related to industrial processes. Manufacturing industries alone consume over 60% of tungsten to develop cemented carbides, tools, drill bits, gas/oil, mining and construction industry. Because tungsten is the world's exceptional hard metal, next to diamond, it is irreplaceable in these applications. Lest not forget unless the world decides to revert back to candle light, tungsten is used for our traditional incandescent light bulbs and the new energy saver lamps.
What is driving Tungsten prices currently?
With the increase demand for Tungsten and a short fall of producing mines outside of China. 2010 could prove tobe an explorative up side to the companies that are producing Tungsten and selling it to the market place.
China has increased domestic demand for tungsten products (it is now importing both scrap and concentrate)
China has decreased raw material exports to preserve reserves. The Country went from providing export incentives for tungsten exports to production and export quotas, and is consistently increasing export tariffs
No new major production has actually occurred outside China and won't until late 2009 TO 2012
Rapid increase in mine development costs limit new production
Limited availability of high grade deposits
Overall, there is a very limited supply of tungsten going to markets outside China and demand for tungsten is increasing within China as well. There is an increasing need for new Tungsten Mines to go into production outside China.
Skyrocketing Tungsten Price
Skyrocketing Tungsten Price
Recently, the prices of tungsten materials such as tungsten ores, tungsten oxide, tungsten trioxide, APT, AMT, tungsten acid and also tungsten powder, tungsten carbide powder, the major non ferrous metal keep increasing greatly. Many people who intend to buy tungsten products find the price is increasing so quickly that they have never expected. In fact, there are several reasons for the skyrocketing price.
First of all, the owners of ore mine keep the mineral on their hands and not willing to sell the materials, expecting the price may go much higher. They will not sell the materials until the price reaches the highest point, and then they can make large sum of money.
Besides, due to the upcoming Spring Festival, most of the manufactures stopped their machines and prepared the overall check and regulation. So the national total tungsten production volume is dropping greatly. With so little tungsten products in the market, no doubt the price keeps increasing.
And the Spring Festival in February is estimated to last 20 days to one month, and experts in tungsten industry believe during this period, the tungsten price will maintain a skyrocketing trend.
Another Malaga Message Board .....http://www.stockhouse.com/Bullboards/SymbolThreadList.aspx?sv=2&s=MLG&t=LIST&f=1&l=25&c=0&r=0
last link its in spanish but look the box with the Peruvian production of metal , TUNGSTEN up 232% . Malaga is the only producer in Peru.
MLG.to PURE TUNGSTEN ... Production UP 232% ...link...http://www.minem.gob.pe/descripcion.php?idSector=1&idTitular=1762
Tungsten - A Worldwide Market Review
http://www.reportlinker.com/p0164500/Tungsten---A-Worldwide-Market-Review.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=prnewswire
Though tungsten demand is persistently growing owing to rapid development in national defense, civil and war industries throughout the globe, increase in supply shortage has become a major growth dampener for the distinctive metal. The growth of the tungsten market depends largely on new discoveries and explorations.
As cemented tungsten carbide is satisfying changing technical demands in milling and turning operations, it is considered a key material for cutting-tool inserts. Ceramic-metallic compounds and ceramics are being produced and used as replacements for cemented tungsten carbide in order to fulfill varying market demands. Demand for more distinctive metal, tungsten, is persistently growing owing to rapid development in national defense, civil and war industries throughout the globe.
These and other market data and trends are presented in "Tungsten: A Worldwide Market Review" by BizAcumen, Inc. Our reports are designed to be most comprehensive in geographic coverage and vertical market analyses.
Im from i from PREU certificate all the information here about the company. Executives now in Peru , trying to list in peruvian market.
FYI - An interesting read -
The Manufacturing Process For Cemented Tungsten Carbide: http://www.mediafire.com/?wzmtzrumqyi
Did you know? Malaga's Pasto Bueno possesses one of the purest (about 99%) tungsten ore concentrates in the world.
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TUNGSTEN CHART
http://www.infomine.com/investment/charts.aspx?c=tungsten&u=lb&x=usd#chart
PERUVIAN METALS PRODUCTION
Skyrocketing Tungsten Price
Recently, the prices of tungsten materials such as tungsten ores, tungsten oxide, tungsten trioxide, APT, AMT, tungsten acid and also tungsten powder, tungsten carbide powder, the major non ferrous metal keep increasing greatly. Many people who intend to buy tungsten products find the price is increasing so quickly that they have never expected. In fact, there are several reasons for the skyrocketing price.
First of all, the owners of ore mine keep the mineral on their hands and not willing to sell the materials, expecting the price may go much higher. They will not sell the materials until the price reaches the highest point, and then they can make large sum of money.
Besides, due to the upcoming Spring Festival, most of the manufactures stopped their machines and prepared the overall check and regulation. So the national total tungsten production volume is dropping greatly. With so little tungsten products in the market, no doubt the price keeps increasing.
And the Spring Festival in February is estimated to last 20 days to one month, and experts in tungsten industry believe during this period, the tungsten price will maintain a skyrocketing trend.
Malaga Inc. is America's leading producer of tungsten ore and owns the only operating tungsten mine in the Americas. In February 2009, Malaga was successful in securing a 5-year supply agreement with a large tungsten end-user. The Pasto Bueno tungsten mine was purchased in 2005 by Malaga which has since invested more than 19.2 million dollars to restart and to increase tungsten production.
Since 1941, more than 6 million tons of tungsten ore has been produced at Pasto Bueno. Current tungsten concentrate production is approximately 5,000 MTU per month (1 MTU = 10 kilos of tungsten concentrate) and Malaga expects to double this in 2010. Malaga produces one of the highest quality tungsten concentrates available in the world due to its low content of impurities.
Malaga trades on the Toronto Stock Exchange (MLG), is a pure tungsten play, and is currently the only publicly traded tungsten producing company outside of China
China has tradtionally been the world's leading tungsten producer, accounting for 85% of the world's production, estimated at 35 000 t of tungsten concentrate. China's tungsten production does not seem to be affected by the slump in global pruices as production remains at about 70% capacity. This compares to 10% production capacity exhibited by western producers. China's wolframite reserves are being rapidly depleted with an estimated 12 years reserves or 600 000 t remaining. Although China has substantial scheelite resources, they are of a much lower grade and quality.
In the past few decades, tungsten prices have been up and down like a toilet seat at a mixed party. According to the International Tungsten Industry Association, since 1950 tungsten prices have “fluctuated between a nadir of $10 per MTU in 1963 and a peak of $175 in 1977.” This all changed in 2005. Since January tungsten prices have moved from the $60 range to break the old high, at the very least in nominal terms, with recent prices quoted at about $220 per MTU.
Investors should note that tungsten is not traded on an exchange, such as the London Metal Exchange (LME), and the only price information that is available globally is published by the London Metal Bulletin and is based on information elicited from producers, consumers and traders.
Conclusion
Chinese supply-demand can be fickle, and the tungsten market has had a bumpy ride as a result, but indications are that, as with most other commodities, the Chinese are eating up inventories and may switch from being net exporters to net importers. If this is the case and there is not a large stockpile just around the bend waiting to blindside the market, tungsten prices should remain around current levels.
Despite impressive looking charts, the share price of publicly listed tungsten vehicles like North American Tungsten and Tiberon Minerals do not factor in the enormous profits that will accrue at $220 tungsten, and investors looking for a speculation still have time to board the proverbial train.
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Since the 1910s, the Pasto Bueno sector produced about 6 million tons of mineral grading approximately 0.75% WO3. The production peaked in 1980-1981, at a rate of 1000 tons/day. From 1982, production decreased due to low tungsten prices. The Company completely ceased its operations in 2002.
In November 2005, Malaga purchased Pasto Bueno. Historically, the previous owner had identified 31 veins, mining ore solely from 5 of these structures. Malaga, having completed surface exploration, has been able to identify to date, 75 veins, 25 of which are major structures. Essentially this means that the Pasto Bueno property still has extensive unknown potential.
LAST UP DATE
http://www.malaga.ca/images/pdf/fact-sheet-nov-2009-en.pdf
Since the time of purchase, the Company has invested CAN$14.2 million for the rehabilitation of the mine and the 250 tons/day plant. In September 2006, it began pre-production at a level of 50 tons/day. The mine reached the mill's maximum capacity in June 2007, and has been producing at a steady level of 250 tons/day. Malaga has also dramatically increased the WO3 recovery rate from a historical level of 50-60% to more than 80% in today's operation. The Company is currently working on upgrading daily production at the plant, in order to reach a daily capacity of 500 tons/day in 2010.
Tungsten offtake agreement with Global Tungsten Products (GTP; formerly Osram Sylvania)
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