Rebound continues in China’s special alloys market

Driven by the bulk purchases being performed by most mills, China's domestic ferromolybdenum market went up continuously in the past week. Meanwhile, the local ferrovanadium prices retained their uptrend, though still without any improvement being recorded in market demand.

Characterized by robust demand in recent days, the Chinese molybdenum alloys market has been maintaining a strong upward trend . By the end of last week, the mainstream prices of ferromolybdenum in Jingzhou were up by RMB 2,000/mt ($293/mt) to the range of RMB 122,000-125,000/mt ($17,862-18,302/mt), while the market prices of molybdenum concentrate (45 percent) were around RMB 1,800-1,850/mtu ($263-271/mtu). Meanwhile, the European market also still maintained its rising trend. European market prices of ferromolybdenum (60 percent Mo) are up slightly by $1/kg Mo week on week to $27-28/kg Mo, while prices of molybdenum oxide in this market are $11-11.4/lb, a climb of $0.5/lb week on week.

Boosted by the ascending prices of raw materials, ferromolybdenum prices in both the domestic and international markets retained their upward trend over the past week. As a result of the continuous increase in the international molybdenum oxide market, hardly any molybdenum oxide materials have been imported into China lately, leading to an expansion of demand for domestic molybdenum concentrate. Thus, 45 percent molybdenum concentrate is now offered at the level of RMB 1,850/mt ($271/mt) according to some producers. With many miners still maintaining halts to their operations, spot supplies of molybdenum concentrate are still on the short side. In addition, given the climbing prices of ferromolybdenum, Chinese mills entered the market actively seeking to buy material, with their purchase prices jumping to RMB 117,000-122,000/mt ($17,130-17,862/mt). Looking at the current situation, supported by the strong demand for ferromolybdenum and the tight supplies of raw materials, molybdenum alloy prices in China's domestic market are expected to continue their rising movement in the near future.

Last week, a slight rebound continued in the Chinese ferrovanadium market against the background of the rising price levels in the international market. At present, domestic quotations of ferrovanadium (50 percent) are up by RMB 2,000/mt ($293/mt) to the range of RMB 97,000-100,000/mt ($14,202-14,641/mt), with vanadium pentoxide (98 percent flakes) up by RMB 2,000/mt ($293/mt) to RMB 92,000/mt ($13,470/mt). Meanwhile, in the international market, quotations of vanadium pentoxide (98 percent flakes) in Europe have remained unchanged at $5.2-6/lb, while market quotations of ferrovanadium (V70-80%) are up by €1.5/kg week on week to €26-27.5/kg.

Global ferrovanadium prices have soared dramatically in recent days given the limited spot supplies of ferrovanadium at Rotterdam, the overhauling works carried out by some international producers and the recovery observed in demand levels. In this context, ferrovanadium prices in China's domestic market have also climbed up. Nevertheless, due to the almost unchanged situation as regards domestic demand, most Chinese players have preferred to assume a wait-and-see stance as regards trading activities. Overall, even though little improvement has been seen in domestic demand, the soaring movement in the international market has driven up the prices of vanadium pentoxide and other raw materials, which are in turn expected to push ferrovanadium prices in the Chinese market up further.