Chinese special alloys market remains soft

Retaining its soft trend, China's domestic special alloys market registered a certain decline in the quotations of various products during the past week. Market demand in China for ferroalloy products has been greatly impacted by the continuous decrease in finished steel prices and there is little indication that the decline in the local ferroalloy market will come to an end.

Over the past week the Chinese ferromolybdenum market has remained on a sliding trend. By the end of last week, the mainstream prices of ferromolybdenum in Jingzhou were down by RMB 5,000/mt ($732/mt) to the range of RMB 145,000-150,000/mt ($21,230-21,962/mt), while the market prices of molybdenum concentrate (45 percent) have declined to RMB 2,200-2,250/mtu ($322-329/mtu). Meanwhile, European market prices of ferromolybdenum (60 percent Mo) are down to $34.5-37/kg Mo, while prices of molybdenum oxide in this market are at $15.2-16.5/lb.

Market prices of molybdenum alloys both in China and overseas have indicated an overall decrease in recent days: deal prices of ferromolybdenum are down to the level of RMB 150,000/mt ($21,962/mt) in the domestic market; meanwhile, the international market has accelerated its declining movement, with quotations of molybdenum oxide down to $15.25/lb in Europe. Looking at the current situation, since only a few mills have recently made purchases of molybdenum alloys, the domestic market has been characterized by a poor trading performance.

The Chinese ferrovanadium market has seen a minor reduction over the past week. Domestic quotations of ferrovanadium (50 percent) have dropped RMB 7,000/mt ($1,025/mt) to the range of RMB 114,000-116,000/mt ($16,691-16,984/mt), with vanadium pentoxide (98 percent flakes) standing at RMB 105,000/mt ($15,373/mt). Meanwhile, in the international market, quotations of vanadium pentoxide (98 percent flakes) in Europe are at $7-7.6/lb, while market quotations of ferrovanadium (V70-80%) are up to €34.2-35.5/kg.

Against the background of descending finished steel prices, various Chinese mills have been restricting their purchases of alloys. As a result, the domestic ferrovanadium market has been characterized by slack commercial activity, with most mills adopting a wait-and-see stance. At the current time, most players are not very optimistic as regards the future trend of the market. Due to the relatively high inventories in their warehouses, some traders recently sold off materials, with the mainstream prices of ferrovanadium still at around RMB 115,000/mt ($16,837/mt), whereas deal prices are down to the level of RMB 110,000/mt ($16,105/mt). Meanwhile, ferrovanadium producers currently do not dare to buy in raw materials considering the market decrease. On the other hand, producers of vanadium pentoxide (98 percent flakes) have maintained their quotations unchanged and are refusing to sell materials at low levels; nevertheless, some traders have lowered their prices, with deal prices down to around RMB 105,000/mt ($15,373/mt).