China’s ferromolybdenum market maintains its rising trend

Supported by increased costs and reduced spot market supplies, quotations of ferromolybdenum in China's domestic market continued to pick up during the past week, while a certain slowdown was observed in the upward trend in the international market. Meanwhile, in a context of insufficient demand, China's domestic ferrovanadium market has been characterized by overall stagnation in recent days.

Last week China's domestic ferromolybdenum market still maintained its rising trend. By the end of last week, the mainstream prices of ferromolybdenum in Jingzhou were up sharply, by RMB 5,000/mt ($733/mt), to the range of RMB 118,000-120,000/mt ($17,302-17,595/mt), while the market prices of molybdenum concentrate (45 percent) were around RMB 1,700-1,750/mtu ($249-257/mtu). Meanwhile, the international market also registered a minor climb in the past week, rising at a slower rate than previous. Currently, European market prices of ferromolybdenum (60 percent Mo) are in the range of $23.5-24.5/kg Mo while prices of molybdenum oxide in this market are around $10-10.5/lb.

As a result of the overall rise in molybdenum concentrate prices, and also given the shortage of supplies of spot materials, ferromolybdenum prices in China's domestic market have remained on their rising trend in recent days. Based on the molybdenum concentrate price of RMB 1,750/mtu ($257/mtu), production costs of molybdenum alloys have been calculated at around the level of RMB 116,000/mt ($17,009/mtu); meanwhile, import prices of molybdenum oxide have also retained an upward trend. As a result, Chinese ferromolybdenum producers have had no choice but to raise their ex-factory prices in order to avoid losses. In addition, the stocks of ferromolybdenum producers are in general relatively low and they are mainly producing to fill orders booked previously, thus contributing to the temporary supply shortage in the market. As regards the international market, commercial activity has appeared quite brisk in recent days against the background of tight availability of molybdenum in the spot market in Europe.

The Chinese vanadium alloys market has been characterized by a general stability over the past week, while a slight rise in prices has been seen in the international market. At present, domestic quotations of ferrovanadium (50 percent) have remained unchanged at the level of RMB 99,000/mt ($14,516/mt), with vanadium pentoxide (98 percent flakes) staying at RMB 90,000-92,000/mt ($13,196-13,490/mt). Meanwhile, in the international market, quotations of vanadium pentoxide (98 percent flakes) in Europe have remained constant at $3.8-4.5/lb, while market quotations of ferrovanadium (V70-80%) are up by €0.7-1.0/kg to €19.5-20.9/kg.

With many market players preferring to stand aside for the time being, China's domestic ferrovanadium market has observed a certain shrinkage in demand levels during the past week. Although some producers announced relatively high quotations, there have been few takers. Meanwhile, with a moderate slowdown seen in mills' purchasing activities, the general view is that the new peak in sourcing activity will not be seen until mid-June. On the whole, China's domestic vanadium alloys market is expected to mainly follow a stable trend in the coming week.