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[Ferro-Alloys.com] Chinese ferro-molybdenum prices are expected to hold firm in the near term in view of higher concentrate feedstock costs and strong demand from steelmakers, according to market participants.
Major Chinese mining companies have raised offer prices after the lunar new year break as higher prices outside of China, driven by supply disruptions in Chile and increased buying interest from alloy producers after the holiday, have bolstered the domestic concentrate market.
Most concentrate suppliers are reluctant to cut prices in the near term, although the European concentrate market has quietened after continued price rises over the past month. Production costs for ferro-molybdenum have moved up to around Yn117,000-119,000/t ex-works based on domestic concentrate prices.
Several market participants are concerned that a potential recovery in supplies from Chile may weigh on the molybdenum market in the coming month, despite an expected uptrend in the near term.
A global shortage of copper supplies may push suppliers to increase production of ore with higher copper grade and lower molybdenum content this year, according to market participants. Copper and molybdenum are associated minerals and many copper producers outside of China mine molybdenum as a by-product.
An expected recovery in economies outside of China and a rise in demand following the easing of the Covid-19 pandemic may prompt global suppliers to reduce exports of unroasted and roasted molybdenum concentrate to China by 50,000t from a year earlier in 2021.
A major molybdenum producer told Argus that China had imported only small volumes of molybdenum concentrate in January-February. China's imports during the two months are estimated to have fallen by at least 15,000t, based on average imports of 8,000-9,000 t/month a year earlier.
A Henan-based roasted concentrate (oxide) producer sold four truckloads of 57pc grade material at Yn1,840/mtu ex-works in the past two days. It is withholding material from sales below Yn1,850/mtu ex-works in response to the higher offer prices from major mining companies yesterday. The producer expects concentrate prices to hold firm in the near term.
Stronger demand from steelmakers also supported the molybdenum market, although tender prices issued by steel producers recently were lower than expected.
Chinese steelmakers have purchased around 16,000t of ferro-molybdenum in January-February, including around 4,500t during the 10 days after the holiday.
Source: Atgusmedia
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- [Editor:kangmingfei]
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