CMOC won 28,336 tonnes of Fanya’s APT stocks for 3.27 billion yuan ($463 million) in an auction on Tuesday September 17.
Rather than casting a shadow on the market, the purchase has bolstered sentiment because most participants do not believe the stocks will flood the spot market any time soon since CMOC will aim to make a decent profit from the purchase.
In addition, some of the stock may have deteriorated over the four years it has been held in warehouses and would need further processing. Some market sources estimate deteriorated stocks could amount to up to 20% of the total purchased by CMOC. Processing deteriorated units could cost around 4,000-6,000 yuan per tonne, according to industry sources.
The final winning bid is equivalent to around 115,340-116,400 yuan per...