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| Anxiety For Listing Prices Of Molybdenum And Cobalt On LME Is Arising |
| = Main Member Companies Of MMTA, To Fluctuate Largely Prices Of Mo And Co |
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London Metal Exchange (LME) is scheduled to list prices of molybdenum and cobalt for trading in futures from the 22nd February of 2010 but a voice to express an anxiety for listing prices of these commodities on LME is arising. At the seminar held on the 9th of September by MMTA (Minor Metals Trade Association), which is a group of traders for handling mainly rare metals, main member companies expressed an anxiety for listing prices of molybdenum and cobalt on LME. An official attitude toward this matter to be taken by MMTA will be decided through voting by member companies (120 member companies in 30 countries) to be closed on the 16th of October and, when more than 50% of voting for disapproval is gathered, MMTA will move to go into an action. The matters in question pointed out by Mr. Howard Masters, a member of MMTA, at his speech delivered on the 9th of September are (1) Prices of minor metals (rare metals) are settled through mutual negotiations between buyers and sellers, and these prices as settled are confidential only for both parties without reflecting listed prices., (2) When prices of molybdenum and cobalt are listed on LME, a possibility to tarde these commodities on the basis of prices listed on LME will come up and prices of these two commodities will multiply to fluctuate for entering into the markets by investors., (3) In spite of the fact that the volumes of reserves of these two metals are extremely smaller than those of metals as already listed on LME, a pressure on suppliers is charged further., (4) The scales for marketing molybdenum and cobalt are small and will be not suitable for trading at LME., and so on. As regards the case to list prices of molybdenum and cobalt on LME for trading in futures, even the consumers concerned have felt an anxiety for this matter but will be welcome to ensure a transparency for setting up these prices through LME. However, in spite of the confined markets for molybdenum and cobalt, funds enter into these markets on speculation and consumers' side will worry about a possibility to fluctuate considerably prices of these two commodities, apart from the principle of supply and demand. When prices of molybdenum and cobalt are listed on LME, these two minor metals will become warrants and have a possibility to form one of commodities for financing. In such case as copper, the scale of this market is bigger than 20.00 million tons per annum and, accordingly, a possibility to fluctuate largely copper price by means of introducing intentionally funds for short term into this market is thin but, in case of nickel to be demanded on a scale of 1,300,000 tons per annum in the world, nickel price had fluctuated to a considerable extent in May of 2007. The supply position of nickel on monthly base had a surplus at the 14th May of 2007 but, owing to speculative funds invested in this market, LME nickel price at that time had risen to US$54,200 per ton as the highest one recorded in its history but, reflecting the rule to regulate backwardation enforced by LME in June, LME nickel had fallen to half of the highest one until August. The world demand for molybdenum is estimated at 200,000 tons on an annualized base, corresponding to approximately 1/6 of nickel quantity to be demanded in the world, and that of cobalt has been more confined. Owing to a considerable fluctuation on nickel price, consumers have already left from nickel consumption since 2007 and steel companies have promoted to shift their usage to ferro-chrome as raw material for production of chrome-based stainless steel, because price of ferro-chrome has been stabilized in comparison with nickel price. In view of the confined markets for minor metals, the matter to list prices of minor metals on LME will enable to ensure a transparency for setting up of prices for minor metals through LME but, at the same time, is anticipated to have a possibility to accompany with the risk to fluctuate largely prices of these minor metals for entering into these markets by organized investors. |
| last modified : Tue 29 Sep, 2009 [10:03] |
