Product 2


	Price Increases: Increases in the cost of raw materials are going to affect the selling prices of some products. Molybdenum disulphate: has increased by over 400% this year. The reasons for this sudden and substantial increase are due to the following factors: 1. Global demand for MoS2 used in lubricants, brake pads and other applications has recently increased to 8000t/yr – against a global production for 2005 to 5000t/yr (largely due t increased Chinese demand). 2. Demand for moly products in the steel industry has risen from 130,000 t/yr to a projected demand of 150,000 t/yr in 2005, (also largely due to increased Chinese demand.) 3. Climax, the worlds largest supplier of MoS2, slowed down their production last year when prices were low and are now not willing to supply new customers. 4. Thompson Creek – their main mine had to close due to a landslide. 5. JDC – the only mine in Asia, have increased their supply to the Chinese steel industry. This latest increase effectively represents a rise in cost of £0.15 per kg for each 1% of Moly contained in a lubricant. It is therefore likely that lubricant manufacturers will have to adopt a surcharge for MoS2 containing products dependent upon the percentage content. .