China Molybdenum purchases Fanya APT stocks

Major tungsten producer China Molybdenum bought stocks of ammonium paratungstate (APT) held by the failed Fanya Metal Exchange (FME) in an auction today, outbidding state-controlled China Minmetals.

The price for 28,336t of APT stocks was eventually settled at 3.27bn yuan ($461mn), equivalent to Yn115,340/t, after 135 bidding rounds over the last two days. This was up by Yn28,939/t from the initial starting price of Yn86,401/t.

The auction started at 10am Beijing time (0200 GMT) yesterday and ended at 10am Beijing time today, with participation from China Minmetals and China Molybdenum and rising bid prices bringing trading activity to a halt.

Spot prices rose to Yn117,000-120,000/t today, up from the 12 September assessment of Yn115,000-117,000/t, as the higher auction settlement shored up confidence in the Chinese market.

There was market talk ahead of the auction that China Minmetals would eventually buy all the APT stocks at the low starting price. China Minmetals possibly planned to keep around 16,000t of the stocks and sell 4,000t each to other producers such as Zhangyuan Tungsten, Jiangxi Tungsten and Xianglu Tungsten. Small APT producers were concerned that these sales at potentially lower price levels would weigh on spot demand.

The stocks are currently stored at Changyue Feiping Nonferrous' (Shanghai) Ganzhou and China Distribution's warehouses. They account for around 20-30pc of China's annual production of APT. China produced around 109,000t in 2017 and 126,000t in 2018.

The intermediate court of Kunming, the capital of Yunnan province, also posted 18,336t of antimony metal stocks for auction on 31 August, which were all purchased by China Minmetals Rare Earth. Antimony prices mostly held firm in early September, but have been rising in the past two weeks.

Fanya also held 3,600t of indium stocks, which were put up for auction twice earlier this year. The exchange's reported stocks of its main listed products included 19,228t of bismuth and 191t of gallium.