China moly prices hit multiyear highs on supply concerns, robust demand
Molybdenum prices in China climbed to their highest level since March 2013 this past week, underpinned by concerns of tightening supply following the recent suspension of operations at a major mine and healthy demand from the domestic stainless steel sector.
Metal Bulletin assessed molybdenum concentrate 45% Chinese free market in-warehouse prices at 1,610-1,650 yuan ($252-259) per metric tonne unit (mtu) on Wednesday January 24, up from 1,590-1,620 yuan per mtu a week earlier.
Inner Mongolia Zhongxi Mining, which operates one of China’s largest molybdenum mines, suspended production at the facility earlier this week, with operations expected to be on hold until late March.
The company, which has monthly production of around 900-1,000 tonnes of molybdenum concentrates, now “plans to expand its output to 1,500 tonnes per month or higher after it restarts operations,” a source familiar with the matter told Metal Bulletin.
“The two-month shutdown is so the facility can undergo technical transformations and prepare for the expansion,” the above source added.
“Supply [of concentrates] has tightened further following the suspension. Meanwhile, restocking demand [from stainless steel mills] remains firm with nearly 2,000 tonnes of ferro-molybdenum tenders concluded this week, bringing the total volume to around 5,000 tonnes for January,” a molybdenum concentrates consumer said.
This source added that demand for ferro-molybdenum from stainless steel mills has increased by around 2,000 tonnes a month since late 2017 after China implemented a ban on the production of substandard steel. Ferro-molybdenum is added to steel to increase its strength and corrosive resistance, and therefore demand for the material has picked up in lieu of the stricter regulations on the production of steel.
“In the past several months, the average monthly tenders for ferro-molybdenum amounted to around 9,000 tonnes, compared with an amount of 7,000 tonnes [per month] on average in 2016,” a second consumer source said.