Chinese special alloys market remains on a soft trend

During the past week the Chinese special alloys market has remained on a softening trend. The Chinese ferromolybdenum market has been gradually trending towards stability from a declining trend on the back of improving demand and in the context of the price increases observed in the global markets. Meanwhile, the Chinese ferrovanadium market has continued its weak trend of previous weeks, due to softening demand and reduced purchase prices from the mills.

During the week in question, market prices of ferromolybdenum in China have continued to trend down. Currently, the mainstream prices of ferromolybdenum in Jinzhou are at RMB 146,000-150,000/mt ($21,408-21,994/mt), down RMB 2,000/mt ($293/mt) while the market prices of molybdenum concentrate (45 percent) remain unchanged week on week at RMB 2,250/mtu ($330/mtu). Meanwhile, a slight price increase has been seen in the global markets with European market prices of ferromolybdenum (60 percent Mo) at $41-41.5/kg Mo, while prices of bottled molybdenum oxide in this market are increasing to $17-17.5/lb.

The Chinese ferromolybdenum market has remained on a soft trend during the past week. However, it is expected that the market prices will see a slight improvement since market demand is improving. Over the past week, although mills including Shanxi-based Taiyuan Steel and Hubei-based Daye Special Steel made total purchases of 1,000 mt of ferromolybdenum, the purchase price remained at a very low level in the range of RMB 143,000-145,000/mt ($20,968-21,261/mt), RMB 3,000/mt ($440/mt) lower than the mainstream market price. Currently, most ferromolybdenum producers are under great cost pressure, partly because the price of premium grade molybdenum is at a high level. Looking at the current market situation, a wait-and-see approach prevails while a stable situation is expected to appear in the Chinese ferromolybdenum market on the back of the turnaround seen in the global market.

The Chinese ferrovanadium market has maintained its weak trend over the past week. Domestic quotations of ferrovanadium (50 percent) are in the range of RMB 108,000-111,000/mt ($15,835-16,276/mt), with vanadium pentoxide (98 percent flakes) standing at RMB 100,000-101,000/mt ($14,663-14,809/mt), down RMB 1,000-2,000/mt ($167-293/mt) week on week in general. Meanwhile, in the international market, quotations of ferrovanadium have remained unchanged with vanadium pentoxide (98 percent flakes) at $7-7.5/lb, while market quotations of ferrovanadium (V70-80) are at €32-34/kg.

Currently, since ferrovanadium producers and traders are having difficulties in selling their products, actual contract prices have trended down. Due to the flat demand seen in the market, mills are lowering their purchase prices to RMB 105,000-112,000/mt ($15,396-16,422/mt). As a result, some leading ferrovanadium producers have lowered reduced their price; in particular, the largest Chinese ferrovanadium producer, Sichuan-based Panzhihua Steel, has reduced its ex-mill price for ferrovanadium to RMB 110,000/mt ($16,129/mt). Meanwhile, although a general sluggishness has been observed in the market, most vanadium flake producers are sticking to price levels above RMB 100,000/mt ($14,663/mt). However, it is expected that the vanadium price will go down in line with the softening in the market.