Chinese ferromolybdenum prices enter declining phase

In the past week China's domestic special alloys market has continued to be characterized by a soft trend. Following its previous temporary rise, the Chinese ferromolybdenum market again faced strong downward pressure due to weak market demand. Meanwhile, the domestic ferrovanadium market still retained its slack trading performance, with a further price decline likely in the future market.

The Chinese ferromolybdenum market posted a soft trend over the past week. By the end of last week, the mainstream prices of ferromolybdenum in Jingzhou were in the range of RMB 148,000-150,000/mt ($21,701-21,994/mt), while the market prices of molybdenum concentrate (45 percent) had declined RMB 50/mtu ($7/mtu) week on week to RMB 2,250/mtu ($330/mtu). Meanwhile, European market prices of ferromolybdenum (60 percent Mo) are at $30-31/kg Mo, while prices of molybdenum oxide in this market are at $13-13.5/lb.

Molybdenum alloy prices in the domestic market gradually began to enter a declining phase in the past week. With limited sales in recent days, most Chinese producers of molybdenum concentrate reduced their sales prices, but only to see scarce deals concluded due to the sharp shrinkage in market demand. Moreover, domestic ferromolybdenum producers have generally refused to sell their materials below the level of RMB 150,000/mt ($21,994/mt), leading to the slowdown in ferromolybdenum trading in the past week. Recently, the Chinese mills have appeared inactive in terms of making purchases, with the mainstream purchase prices moving in the range of RMB 144,000-150,000/mt ($21,114-21,994/mt). At present, most domestic ferromolybdenum users have sufficient stocks in hand, and so the market is expected to remain on its weak trend in the short term.

Meanwhile, the Chinese ferrovanadium market continued to slip slightly during the past week. Domestic quotations of ferrovanadium (50 percent) have declined by RMB 1,000/mt ($147/mt) to the range of RMB 105,000-107,000/mt ($15,396-15,689/mt), with vanadium pentoxide (98 percent flakes) standing at RMB 95,000-98,000/mt ($13,930-14,370/mt). Meanwhile, in the international market, quotations of vanadium pentoxide (98 percent flakes) in Europe are at $6.7-7.5/lb, while market quotations of ferrovanadium (V70-80%) are down to €26-27.5/kg.

Against the continuing slackness in the domestic ferrovanadium market, in the past week Chinese mills have seemed cautious as regards purchasing activity, with the purchase prices down to the level of RMB 104,000/mt ($15,249/mt) according to some mills. Given the sliding levels of market prices, in recent days most traders have been standing aside from the market. Looking at the current situation, ferrovanadium prices in China are likely to fall to RMB 100,000/mt ($14,663/mt) in the near future in the context of the bearish levels of commercial activity. As regards the future, since no great change is expected in the relationship between supply and demand in the short term, overall market prices are likely to retain their weak downward movement.