The executive meeting of standing committee of the state council has made the decision on the reformation of mineral resource tax on molybdenum since May 1st, 2015. Under the policy of no more burden on enterprises, the imposed tax rate will be given a reasonable percentage, and the resource compensation fee will be driven to zero.

　　During this round of reformation, the mineral resource tax will be levied by price rather by quantity, the relative price regulation fund will be terminated, and illegal toll will be cancelled.

　　The change on tax imposition will effect production cost immediately, and before the announcement of the actual tax rate, the attitude is mostly hesitation. Yet, the cost of molybdenum concentrate will fluctuate little, and the growth rate of demand will slow down. Thus, the performance of mines can hardly improve. Another producer even points out that a mine with rich ore yet lower grade may even suffer.

　　This year, ever time the steel mill holds a tender, the price goes down. The reformation on taxation gives an illusion to mills that there is more room for price to drop. Steel mills may push price down even harder, but this does not necessary give them a winner's belt.

　　According to relative statistics, the rate of slip of the iron ore is slower than that of steel products, which makes the depression even longer. In order to reduce the cost, steel mills have to reduce the purchase cost on every raw material procurement. Though careful calculated and strict budgeted, steel mills still face a hard time, which have to dump stock material actively and slow down the production to ease the pressure. The molybdenum market cannot escape the disaster, but down with the steel industry.

　　Our opinion is, the molybdenum price will stay low for a relatively long time. As the environmental protection policy and admittance criteria tightens, the reformation and merging of the industry will speed up.

　　As the profit margin narrowing, taxation policy standardizing and the cancellation of export restriction, giant enterprises with huge advantage of finance, technology and branding will no doubt get more and more share during the competition, especially for those leading companies.

　　The domestic molybdenum companies will also face more challenge from global market, then.