Molybdic oxide, ferro-molybdenum prices dip on profit-taking

Slowing spot demand caught up with the molybdic oxide and ferro-molybdenum markets this week, with prices dropping after suppliers cut their offer prices to book profits following a strong rally in recent weeks, sources told Metal Bulletin.

Metal Bulletin assessed molybdic oxide prices at $11.80-12.00 per lb in-warehouse Rotterdam on Wednesday January 31, down 20 cents from Friday. The market was assessed at $9.80-9.90 per lb at the end of last year.

For ferro-molybdenum, European prices moved down to $29.50-30 per kg in-warehouse Rotterdam, from $29.75-30.50 per kg previously, paring a run that has boosted market prices about 20% since the end of last year. The market was at $24.50-25.10 per kg at the end of December 2017.

"The Korean market is coming off in price," one trader said about the oxide market. "Consumers in Europe say there are a lot of offers in the spot market, but little business is being concluded. We offered at $11.90 and got nothing, so we dropped another 10 cents per lb."

However, other sources reckon price losses should be limited in the near term despite the current slowdown in demand.

"Consumption is looking strong through the first quarter and there are no additional units," another oxide trader said. "There is only small trading activity in the oxide market at present, which is looking at a return to more active business in Asian markets after the Chinese New Year festival later in February. Prices should move up again after that holiday in line with demand, and for now market dealers are mentally prepared for quieter markets until the Chinese go on holiday."

The rally in molybdenum markets until the past week had propelled oxide prices to a three-and-a-half-year high, with ferro-molybdenum prices increasing to the same historical comparison. And despite the recent slip in prices, the European molybdic oxide market is at a level last seen in August 2014, a year when the market peaked at $14.80-15.30 per lb in May.

This week only 20 tonnes were reported traded at $11.80 per lb, after only another 20 tonnes the week before. Around 180 tonnes of oxide were reported traded three weeks ago. Another deal was heard at $11.90 per lb for 20 tonnes of oxide, but was not confirmed. Oxide supplies to the spot market are tight due to none being made available from producers such as Climax and Molymet so far this year, leading some sources to suggest that this is having a knock-on effect to ferro-molybdenum supplies.

Like the oxide market, the ferro-molybdenum market Europe is hovering around levels last seen in August 2014 when spot prices were $31.70-32.20 per kg after hitting an annual peak that year of $36.50-37 per kg in May. The market has climbed from $21.50-21.90 per kg since the start of last December against a jump in ferro-silicon prices, increasing the cost of converting molybdic oxide to ferro-molybdenum.

European spot ferro-silicon prices have edged up in the past week, holding onto the current record high from December on firm fundamentals. Prices are now at their highest levels since Metal Bulletin started assessing the market in January 1997. Metal Bulletin assessed European ferro-silicon, lumpy basis 75% Si, prices at €1,700-1,760 ($2,113-2,188) per tonne on Friday January 26. Only 10 tonnes of ferro-molybdenum was reported traded at $30.00 per kg so far this week after around 120 tonnes of ferro-molybdenum the week before.

"Market activity in moly is slowing down ahead of the Chinese holiday in mid-February," one trader said. "But European fundamentals are strong and prices should consolidate around these levels."

Suppliers reported offer prices as low as $29 per kg for shipment at the end of February and into early March.

"Consumers look very well booked for February and there is some profit-taking," another trader said. "Material that was booked for alloy and oxide at lower prices in December is starting to arrive at customer addresses in Europe. There is some market nervousness in the near term as to what consumers may want through February, but we see things fairly stable in the next week or so."

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