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Price of Moly Oxide May Enter Into Dangerous Water Level Of US$10 / Lb.
= Being Encouraged By Chinese Movement To Replace Moly Sources, Actual Demand In 2009 Decreases By 20%
It is questioned whether the international price of molybdenum oxide will be able to reach soon the level of US$10 per lb. of Mo. Some of the traders concerned have propagated their recent contracts, which have been concluded at a nearer price to US$10 per lb. of Mo, but an atmosphere in the whole market is still difficult to contract molybdenum oxide on the level of US$10. The reason is that Chinese side has still held a strong intention to purchase molybdenum but their price idea for purchase is US$9 per lb. of Mo as the maximum.

According to the customs-statistics released in China, this country imported 14,568 tons in material of molybdenum (corresponding to 7.7 - 7.8 million lbs. on Mo content base) in January - March quarter of 2009, which had a remarkable increase of 9 times compared with that in the same quarter of 2008. It was also informed that even the statistics as mentioned above is still supposed to be less than the actual scale of contracts concluded to import molybdenum into China.

At all events, the factor, having bottomed out price of molybdenum oxide by US$7.50 per lb. of Mo and turned to rebound the price, is mainly due to the activities in China to purchase more molybdenum, and market price of molybdenum oxide has currently risen to US$9.40 per lb. of Mo, approaching a nearer level to US$10. Some of the parties concerned have a view that, if this fever continues even in June, price of molybdenum oxide is anticipated to exceed the level of US$10 per lb. of Mo and to recover to the line of US$12.

It is assumed that consumers endeavored to reduce their stocks of molybdenum for more than 6 months and already finished this reduction of the stocks. Since molybdenum has no substitutive metal, only the thing left is a recovery of the actual demand for molybdenum. However, this subject is still not clear yet and there is an opinion in the market that a revival in production of stainless steel and special steel is expected to come up in the second half of 2009 or in 2010.

Under the circumstances, Mr. John Graell Moore, President of Molymet in Chile, said to a local news paper that the consumption of molybdenum in 2009 is estimated to have a decrease of 30% in the western world and also to decrease by 20% at least in China. In the course of this aspect on molybdenum consumption in the world, it is hardly possible to understand that only the demand for molybdenum in China is particularly able to surge.

The mainstream, having caused to boom positive imports of molybdenum into China, seems to be the replacements with the molybdenum produced in China but reduced substantially as its production is not payable for cost. In this meaning, it is marked to see from when do medium and small mines in Huludao district of China determine to resume molybdenum production. In the period when price of molybdenum oxide had fallen to a low level of US$7 - 8 per lb. of Mo, it was a wise policy for Chinese enterprises to have suspended molybdenum production and preserved molybdenum resources but, since price of molybdenum oxide has risen to a level of US$10 per lb. of Mo, it is severe for Chinese producers to decide whether shutdown molybdenum mines have to be reopened or not.

Thompson Creek Metals, a leading producer of molybdenum in the western world, commented recently that the total quantity of molybdenum sold by molybdenum producers in the western world in January - March quarter of 2009 had a decline of 3% but increased only the exports for China in the quarter by 25% in comparison with those in the same quarter of 2008. Therefore, it is certain that molybdenum producers in the western world increased their sales of molybdenum to China accordingly.
last modified : Tue 19 May, 2009 [10:45]
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