Ferro-molybdenum prices in Europe took a nosedive on Wednesday October 8, on aggressive selling and extremely poor sentiment, market participants said.
Metal Bulletin’s quotation dropped to $23.90-24.70 per kg in-warehouse Rotterdam, from $25.50-26.45 per kg previously, as participants described a market almost in freefall.
Prices have now fallen below the levels at which the spectacular rally began at the end of March, and have dropped about 25% since the beginning of September. The latest move also marks a fall of 6% from Friday’s quotation, or $1.60-1.75 in one go.
From their 2014 peak in July, prices have dropped about 35%, and are now close to levels last seen in October 2013.
Molybdic oxide prices also fell, dropping to $9.40-9.60 per lb in-warehouse Rotterdam, and participants are already beginning to discuss the possibility that figures below $9 will emerge before long.
“There are one or two aggressive players and they're putting pressure on oxide, and pressure on ferro-molybdenum,” a producer said.
There is now more scope for participants to go short, a trader said, as material for delivery at the end of October is being sold at the lowest prices.
“You’ve got a couple of weeks, and in those couple of weeks, you can hopefully get some cheaper material to cover,” he said.
“We’re in a price range that’s the lowest for this year. [The steel mills] are checking the prices maybe to buy larger quantities when the prices go lower.”
These levels are now the norm for the market, a second trader added, and buyers will soon be expecting to pay even less.
“I think the second and third quarter [when prices peaked above $37] were an aberration. That rise was never really going to be sustainable in a market like moly,” he said.
“When people are producing normally, there’s much more supply than demand. Demand has tapered post summer and it’s been quite uninspiring.”
The sentiment in the market is now more or less uniformly negative on prices, as hopes for a turnaround disappear.
“No one has anything remotely bullish or optimistic to say now. It’s patently obvious that there’s a sea change in how people are presenting themselves,” the second trader said.