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Supply And Demand Of Molybdenum In Japan In First Half 2010
= Imports Of Moly Oxide Increased, World Production Of Moly In 2011 Is Anticipated To Be Restrictive
The actual quantities of molybdenum imported, produced and consumed by Japan in the first half (January - June) of 2010 were traced. Since the output of steel products in Japan has revived, the consumption of molybdenum in Japan has increased and, as a matter of fact, Japan imported 15,888 tons in material of molybdenum ore (molybdenum oxide) in the first half of 2010, having had a considerable increase of 46.1% compared with that (10,871 tons) in the same period of 2009.

In the first half of 2010, Japan produced 11.907 million tons of special steel products as increased by 90.3% from that in the same period of 2009 and also produced 1.545 million tons of stainless steel products, having had a remarkable increase of 163% compared to that in the same period of 2009. Therefore, the consumption of molybdenum in Japan in the first half of 2010 increased accordingly..

The most noticeable event of molybdenum in the first half of 2010 was that price of molybdenum oxide has been listed on LME (London Metal Exchange) from the 22nd of February for its future trading. However, in comparison with cobalt metal, price of which has been also listed on LME at the same time for its future trading, molybdenum is not so familiar with LME and, in view of the fact that such a leading producer of molybdenum in the world as Codelco of Chile has taken an attitude to watch carefully about further movements of molybdenum at LME (Codelco brand molybdenum is so far not listed on LME), the volumes of molybdenum oxide traded at LME were not substantial as an unexpected development.

The price of molybdenum oxide quoted at LME in a period of February to March of this year had once risen to a level of US$17 per lb. of Mo and the parties concerned had expected to rise further price of molybdenum oxide at LME to a higher level than US$20 per lb. of Mo in the near future but, owing to an opaqueness of risks to trade molybdenum oxide at LME for future deliveries, the volumes of molybdenum oxide traded at LME were so far unable to surge. The price of molybdenum oxide quoted at LME had reached a ceiling of US$18 per lb. of Mo as recorded in April but, after that, has turned to fall gradually.

The prices (per lb. of Mo) of molybdenum oxide published in Metals Week in the first 9 months of 2010 had moved as follows ; <> January - March quarter : US$13.75 - 17.41, <> April - June quarter : US$17.58 - 14.61 and <> July - September quarter : US$14.00 - 15.63, which were sluggish ones.

While molybdenum prices had been depressed in the first half of 2010 on a global scale, China had played an important role of this depression in the world market of molybdenum. China had transformed in 2009 to the country to import molybdenum with net quantity but has shifted from May of 2010 to the country to export molybdenum with net quantity on monthly base and, consequently, China has caused to put a pressure of their supply ability on the world market of molybdenum. China suddenly imported molybdenum with net quantity of 63.6 million lbs. of Mo in 2009 and has currently transformed to the country, having maintained a balance on exports and imports of molybdenum. The reason is that China has increased their exports of molybdenum from a recent time.

From April of this year, when China has resumed to export molybdenum with substantial quantities, molybdenum prices in the world have turned to weaken and an atmosphere of the market, which has mixed a disappointment of China (expected to increase imports) with a precaution of aggressive sales at discounted prices by China, has arisen. A balance on main three items of molybdenum traded by China has still shown an excess of the imports but the quantities of all kinds of molybdenum products, including molybdenum metal, molybdenum chemicals, and so on, imported and exported by China have been balanced as a whole.

As regards molybdenum prices in 2011, a key depends on an issue of the excessive stocks of molybdenum imported by China in 2009. There is an opinion in the market that the increased stocks of molybdenum in China will be the factors to put a pressure on prices of molybdenum products until January - March quarter of 2011 at least. At the General Meeting of IMOA (International Molybdenum Industry Association) held recently in Peru, the members attended at this meeting were supposed to have individually felt a similar atmosphere. The total quantity of molybdenum stocked in China as distressed cargoes has been estimated variously and a view is in the range of 25 - 50 million lbs.

In addition, steel companies of China have concluded in 2010 the contracts to import molybdenum on long term base. The substantial quantities of molybdenum under these contracts have been imported into China and accumulated at bonded warehouses in wharves of discharging ports. These excessive stocks of molybdenum stored at bonded warehouses may put a pressure on the supply situation of molybdenum in the world.

However, a depression of molybdenum prices in the second half of 2010 is thought to become the factor to defer the times to complete new molybdenum projects, because a weak tone of molybdenum prices at present has included many risks to materialize these projects. A possibility, which large molybdenum projects are developed as scheduled, is becoming thin.

Consequently, a growth in the world production of molybdenum in 2010 is anticipated to be within 4% on an annualized base and, on the other hand, the world consumption of molybdenum in the same year is estimated to expand by 10% per annum. From this point of view, the international prices of molybdenum products in the second half of 2010 have a large probability to turn to a strong tone.
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last modified : Wed 20 Oct, 2010 [09:49]
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