Seoul plans to stockpile minor metals to protect electronic production
March 8, 2006
By Kang Shinhye
Seoul - South Korea planned to stockpile strategic reserves of minor metals, which are crucial for making information technology (IT) goods and electronics, to avoid supply disturbances and price spikes, an official at a state-run resources agency said yesterday.
Prices of minor metals such as indium, tungsten and antimony have soared over the past three years due to speculative buying and increasing demand for hi-tech products.
South Korea, a top producer of microchips and cellphones by brand names such as Samsung and LG, has to import most of these minor metals from China, Russia, South Africa and the Democratic Republic of Congo.
"Most suppliers are very vulnerable to domestic politics and economics. If the metal imports from the countries are suspended because of war or natural disaster, this would badly hit South Korea's IT industry," said an official at the Korea Resources Corporation.
Seoul will spend 183 billion won (R1.18 billion) over 10 years starting next year to buy 14 minor metals, including indium, ferromolybdenum, cobalt, manganese, antimony, ferrotitanium and ferrotungsten.
The state-owned corporation plans to build a warehouse as early as this month to house 85 630 tons of the metals, the equivalent of two months of import demand for South Korea.
Up to now, South Korea has had reserves only of major base metals such as copper and aluminium.
But industry experts have warned Seoul needed to secure supplies of minor metals as its export-dependent economy relied on them to supply an increasing demand for IT products and as metal prices rose.
South Korea is expected to raise its output of semiconductors, which use molybdenum, by 27.1 percent this year and output of communication goods, which require antimony, by 11.5 percent, according to the Korea Institute for Industrial Economics & Trade.
Shipments of home appliances are forecast to rise 10 percent this year. Indium is used in liquid crystal display television and computer screens, both big export items for Korean firms.
Industry experts are also worried that China, one of the major suppliers of rare metals, will move to tighten exports. Last year Beijing said it would restrict mining of metals such as antimony and tungsten to prevent exhaustion of vital resources.
"If domestic supplies in China are getting tighter and suppliers are holding back sales, the prices will keep going up," a metals trader said.
Antimony prices recently rose to $4 250 (R26 860) a ton, their highest level since August 1995, on a lack of Chinese supplies.
Indium prices have also extended their rally from a dip in the fourth quarter of 2005. They were quoted at $980 a kilogram and were approaching last year's highs above $1 000.
South Korea imported 79 tons of indium, 12 059 tons of antimony, 185 tons of cobalt and 133 tons of ferrotungsten last year. - Reuters
|
|
