China is unlikely to reclaim its position as a major exporter of molybdenum oxide and ferromolybdenum despite the World Trade Organization ordering the country to remove export taxes and quota controls on the commodities, market sources said Thursday.
In a ruling Wednesday, a WTO panel concluded that China violated the organization's membership obligations by restricting exports of rare earths, tungsten and molybdenum. The US filed the dispute in 2012, in cooperation with the EU and Japan.
The outcome was within Chinese market expectations, sources said. They did not expect the government to act quickly to remove the 20% export tax on ferromoly and 15% tax on moly oxide. They said the country would likely remove the policies at the end of this year and take effect on January 1, 2015.
The country has 60 days to contest the findings and a six-month grace period afterward, sources in China's moly market said.
They added that China could impose or increase other permitted taxes such as mineral resources taxes to replace the export tariffs as a way to continue minimizing exports of moly products.
"Beijing's stance on these mineral exports has always been clear that it does not encourage their exports as these resources are exhaustible and with strategic importance, and Beijing will stick to its stance even with the pressure from WTO via other measures," a Beijing-based moly trader said.
China started controlling exports of molybdenum products in 2007 via the export quota and taxes, significantly cutting export volumes.
In 2006, China exported 28,786 mt of moly oxide and 18,598 mt of ferromoly. By 2013, the volumes plummeted to 955 mt and 41 mt, respectively, according to Chinese customs figures quoted by Chinese industrial media.
