Japan temporarily cuts stainless output to test the waters on the market's response

By Leia Michele Toovey- Exclusive to Moly Investing News

Japan wants to test the moly market, and will do so by issuing a temporary cut in the November nickel stainless molybdenum (SUS316) steel output.  Output will be cut approximately 10 per cent, and for the time being, the curb in production will only last a month to see how the market reacts.    According to government data, Japan produced 27,004 tonnes of SUS316 equivalent stainless steel in July 2008 and 24,113 tonnes in August 2008.

Production fell in August as plants closed in mid August for holidays. Production for September and October 2008 is likely to be between the July and August figures, but a drastic fall is expected starting November 2008. The current consumption of molybdenum products for SUS316 production is roughly 500 tonnes per month.

The world’s second biggest moly producer, Chile, is witnessing declining copper and molybdenum outputs.  Molybdenum output in the month of September was 2,437 tonnes or 40.7 per cent less than in the year ago period. For the Jan-Sept period, molybdenum output was down 25.7 per cent to 24,501 tonnes. The decline in moly output is in unison with a decline in copper output; with a dropping off in ore grades in Chile’s main mines being the main causal factor.  State copper producer Codelco’s output in the first three quarters of this year fell 7.83 per cent year-on-year due to lower grades and other operational challenges. “The main issues accounting for lower production were conflicts with contractors, environmental issues at El Teniente and Andina and lower than average grades due to older mineral deposits especially in Chuquicamata and El Salvador,” Codelco executive president José Pablo Arellano told reporters during a Santiago press conference.

As a result of the lower output, coupled with higher costs, the company’s pre-tax profits fell to $4.86 bn in the recent period from $6.74 bn year-on-year. Total costs amounted to $1.81/lb in the recent period, up from $1.35/lb year-on-year. Cash costs after molybdenum byproduct credits averaged $0.63/lb in the first nine months of this year, compared to $0.34/lb year-on-year. Molybdenum output in January-September totaled 15,000 t, versus 21,000 t year-on-year.  Molybdenum sales totaled 19,000 t in the recent period, compared to 21,000 t year-on-year.

Thompson Creek Metals Company Inc., one of the world’s largest publicly traded pure molybdenum producers, has scheduled a conference call for analysts and investors to discuss its third-quarter 2008 financial results on Friday, November 7, 2008 at 8:30 a.m. EST. A news release on the results will be issued after markets close on November 6, 2008.

Molybdenum miner Moly Mines has its Spinifex Ridge Molybdenum Project poised for immediate implementation. All permitting activities for the mine facility have been completed, and construction will commence once funding has been secured. In light of the current financial market, a revised production date (2010) is now being targeted. “The unprecedented rapid deterioration of the global financial markets means that full funding cannot be achieved before the end of 2008. However the company has taken the intermediate step toward the full project funding with the completion of the Trust Company of the West $150 million interim financing facility,” the company said in a statement. As a result of these difficult market circumstances the company is also instigating a concerted cost reduction program across all its activities to conserve its cash resources until the development funding is in place.

Creston Moly Corporation has received an updated resource estimate for its Creston Molybdenum deposit located in Sonora, Mexico. Mine Development Associated, based out of Reno, completed the estimate based on data provided from 116 drill holes.  The results of the analysis were: measured and Indicated Resources are estimated to be 176.9 million tonnes averaging 0.071 per cent Mo and 0.046 per cent Cu (278 million pounds of molybdenum contained and 179 million pounds of copper contained), 40 per cent of the total measured and indicated resources, approximately 73.5 million tonnes, average 0.103 per cent Mo and 0.054 per cent Cu (167 million pounds of molybdenum contained and 88 million pounds of copper contained).

A near surface, high grade breccia has been defined, within the eastern portion of the deposit that contains approximately 19 million tonnes of measured and indicated resources averaging 0.098 per cent Mo (41 million pounds of molybdenum contained) at a 0.03 per cent Mo.  Creston CEO Jon George was elated with the findings. “The release of this resource estimate is a major milestone for our company and our shareholders. The data confirms that the Creston Molybdenum Deposit is indeed one of the best undeveloped molybdenum deposits in the Western Hemisphere, “commented Mr. George in a statement.  The Company’s COO, Dr. Sadek E. El-Alfy, added, “this is an open pittable deposit with excellent infrastructure and logistics in a stable, mining friendly community.

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