Chinese special alloy prices continue soaring movement

During the past week China's domestic special alloys market continued its upward trend. On the back of the surging raw material prices and the rising prices in the international market, ferromolybdenum prices in China soared strongly in the past week. Meanwhile, domestic ferrovanadium prices moved steadily up, with no big change observed in downstream demand.

Over the past week the Chinese ferromolybdenum market continued its ascending movement, posting a strong rise in prices. By the end of last week, the mainstream prices of ferromolybdenum in Jingzhou were up by RMB 18,000/mt ($2,635/mt) to the range of RMB 158,000-163,000/mt ($23,133-23,865/mt), while the market prices of molybdenum concentrate (45 percent) have risen by RMB 250/mt ($37/mt) to RMB 2,300-2,350/mtu ($337-344/mtu). Meanwhile, the European market also continued its upward trend. European market prices of ferromolybdenum (60 percent Mo) are up by $4/kg Mo week on week to $38-40/kg Mo, while prices of molybdenum oxide in this market are at $16-17/lb, a climb of $1.5/lb week on week.

Looking at the current situation, the tight supply of molybdenum concentrate in the domestic market as well as the rapid rise of prices in the international market are the major factors pushing up local ferromolybdenum prices in China. From January to May inclusive, China imported a total of 26,725.8 mt of molybdenum oxide, with the average monthly import volume at 5,345 mt. With the increased price levels in the international market, Chinese mills have had to source raw materials from domestic suppliers, leading to a supply shortage in the current market. In addition, the continuous rise in the international molybdenum alloys market has helped to drive up the domestic market significantly in recent days.

The Chinese ferrovanadium market has maintained its climbing movement over the past week. Domestic quotations of ferrovanadium (50 percent) have risen RMB 6,000/mt ($878/mt) to the range of RMB 110,000-115,000/mt ($16,105-16,837/mt), with vanadium pentoxide (98 percent flakes) up by RMB 4,000/mt ($586/mt) to RMB 100,000-103,000/mt ($14,641-15,081/mt). Meanwhile, in the international market, quotations of vanadium pentoxide (98 percent flakes) in Europe are still at $6-7/lb, while market quotations of ferrovanadium (V70-80%) are at €28.5-30/kg.

Last week China's domestic ferrovanadium prices moved up steadily in a context of general optimism in the market. Although commercial activity between traders has increased to a certain extent, demand from millls has failed to see any big change in recent days. Considering the sharp fluctation in vanadium alloy prices, some producers have stopped giving offers. Overall, most market players are quite bullish as regards the prospects for the future trend of the market.