Stainless Steel Me

Molybdenum oxide and ferromolybdenum prices eased this week amid weak demand in Asia, Europe and North America and on signs that Chinese buying of oxide may be slowing. The volume of business reported by market participants was down substantially on recent weeks, largely because most of the molybdenum business to China is now being concluded directly between producers in the US and South America and not from European traders.

According to one European trader, the Chinese domestic price of ferromoly has come down below the CNY 100,000 per tonne level to CNY 98,000 per tonne, which gave no margin to Chinese converters importing molybdenum oxide at current price levels.

Meanwhile, there are also reports that the Chinese carbon and stainless steel industry are reigning in production levels, which rose in December, January and February, to avoid building large surpluses of unsold material.

Several traders said if China’s molybdenum oxide purchases evaporate, prices could be headed for USD 6 per pound or less. In Asia, no spot market sales were reported in Japan and one European trader said that Japanese traders and consumers were sitting on 10 months worth of inventory at current usage levels. One consumer, however, was understood to have called in 20 million tonnes of oxide from a requirements contract on a formula based on Platts molybdenum oxide dealer prices.

source Platts