KUALA LUMPUR (Feb 19): Press Metal Aluminium Holdings Bhd shares fell as much as seven sen or 1.69% to RM4.07 so far today after Water, Land and Natural Resources Minister Dr Xavier Jayakumar said yesterday moratorium on the mining and export of bauxite from Pahang will not be extended.
Aluminium is derived from bauxite, a sedimentary rock. As such, the Pahang bauxite mining and export moratorium expiry after March 31, 2019 has generated anticipation of a larger global supply of aluminium.
Today, Press Metal's share price fell as anticipation of a larger global supply of aluminium sent world prices of the commodity lower. At 12:30pm today, Press Metal shares settled at RM4.07 among Bursa Malaysia's top decliners with 1.27 million units traded.
Yesterday, Bernama, quoting Dr Xavier, reported that the moratorium on the mining and export of bauxite from Pahang which ends on March 31 will not be extended
It was reported that following the announcement, all activities on the mining and export of the ore can be resumed, although this time with a new standard operating procedure as well as tighter enforcement of the law. "The moratorium will not be extended after March 31… I see that there is a strong demand for the bauxite industry in Pahang and the profit derived by the state is also enormous," he said.
Today, global aluminium prices fell as investors reacted to the news. Reuters reported that Shanghai aluminium prices moved lower in early trade on Tuesday after Malaysia said it would not extend a moratorium on mining bauxite, potentially reducing costs in the aluminium supply chain for top producer China.
It was reported that the most traded April aluminium contract on the Shanghai Futures Exchange slipped 0.4% to 13,395 yuan (US$1,977) a tonne as of 0156 GMT, just above the two-year low of 13,230 yuan struck last month. It was reported that three-month aluminium on the London Metal Exchange was down 0.1% at US$1,855 a tonne.