EU Mo metal hits fresh highs on supply constraints
Published date: 11 January 2023
European prices for molybdenum ingot have climbed to their highest level since Argus launched
the assessment in 2019, as firm demand in China compounds existing supply tightness.
Argus' assessment for minimum 99.8pc molybdenum ingot jumped to $75-80/kg in-warehouse
Rotterdam yesterday, up from $65-70/kg late last week.
"For moly ingot, the supply of raw materials is too tight; demand in China is very strong, and it
was especially firm in December," a Chinese supplier said. "Consumers in Europe need material
and [for them] to find these price levels after the Christmas break is a concern."
"One of the biggest producers of moly oxide is not signing long-term for converters with Asia,
they want to secure material with Europe and the US, and so they ask for a premium in Asia,
" the supplier said. "Asian buyers do not want to pay a premium, so they didn't sign. That is
why the spot market is so tight."
While there are some stocks of molybdenum oxide and ferro-molybdenum in Europe — as these
are more liquid markets that garner more interest from traders — inventories of moly ingot in
European warehouses remain critically low. The supply shortage emerged in 2022 with
downstream consumers reporting less material available from China.
"There is zero availability on the ground and some people actually flew some material from China,"
a trader in Europe said.
Some traders tested the water this week and were offered material within a range of $78-80.50/t
for February shipment but there was still some resistance to higher offers.
"I am not going to take a position when prices are at an all-time high," the trader said.
Other sources are awaiting material that is on the water and en route already, and they are avoiding
taking any risks compounding shipping delays or reneges, they told Argus.
Both traders and end-consumers are also monitoring developments in the molybdenum complex
looking for price direction. After severe increases, prices for oxide and FeMo softened yesterday
in Europe.
European molybdenum oxide prices dropped to $31-31.60/lb duty unpaid Rotterdam from the
5 January assessment of $32.20-32.40/lb following lower prices in South Korea and lower bids
from buyers. However, availability in Europe remains tight despite slower buying interest at higher
levels.
Ferro-molybdenum prices fell to $71.15-72/kg duty paid Rotterdam, down from the 5 January
assessment of $73-74.50/kg in response to some profit taking from traders.
Meanwhile, Chinese ferro-molybdenum prices are expected to take a pause in the coming week
after hitting a 15-year high because of softening buying interest from steel mills and a slowdown
in logistics services ahead of the 21-27 January lunar new year holiday.
But market participants noted that strong Chinese demand and a narrow spread between oxide
and the alloy in Europe could curb any falls in the near term.
Global molybdenum consumption is expected to continue increasing over the next decade as
demand for molybdenum-containing steels grows. But production has been squeezed by
lower molybdenum content in mined ores seams and a lack of new molybdenum projects to
meet demand.
By Cristina Belda
Source: argusmedia.com
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