Chinese ferromolybdenum market maintains stability

SteelOrbis Shanghai The Chinese ferromolybdenum market has maintained a trend of slight fluctuation over recent days. With no changes in the domestic market prices, the export quotations have continued to rise. Meanwhile, due to the tight supply of molybdenum concentrates, the traders are unwilling to make sales. Furthermore, the rumored export permit application system was finally issued on March 11, and is now in the stage of examination. At present, the mainstream market prices of ferromolybdenum (Mo60) in Jinzhou are at RMB 280,000-285,000/mt ($36,142-36,787/mt), while those in Henan Ruanchuan and Jiangsu Yangzhong are around RMB 277,000-282,000/mt ($35.754-36.400/mt). The prices of molybdenum concentrates in Ruanchuan, Qingtian, and Huludao are at RMB 4,100-4,150/mtu ($529-536/mt). With the quotations of ferromolybdenum in the European market standing at $77-81/kg Mo, China's export quotations have risen $3-4 week on week to $69-71/kg Mo. As a result of the reduction in the mills' ferromolybdenum inventory over the post-festival period, most mills concluded significant purchases from March 1 to March 10, thus boosting up the market prices from RMB 275,000/mt ($35.496/mt) to RMB 285,000/mt ($36.787/mt). However after March 10, the volume of purchases began to shrink and the market began to see stable movement on the whole. In spite of the short supplies of molybdenum concentrates, the mainstream prices did not see any increase. Traders are unwilling to sell their products. Based on the present market situation, the ferromolybdenum market is likely to maintain its stable movement for some time. The rumored export permit application system has finally been announced, and is expected to effectively limit China's exports of natural resources. It is estimated that China's ferromolybdenum exports will be cut back by about 10 percent, thus increasing the domestic market supply. This is likely to have a cooling-effect on the market in 2007.