FeMo prices roar upwards unchecked ahead of Easter break

Ferro-molybdenum prices continued their meteoric rise in Europe on Wednesday April 16, as demand from the stainless steel industry remains strong and supply is still tight.

Ferro-molybdenum prices continued their meteoric rise in Europe on Wednesday April 16, as demand from the stainless steel industry remains strong and supply is still tight.

Metal Bulletin’s in-warehouse Rotterdam quotation moved up to $32-32.40 per kg on Wednesday, from $30.20-30.50 per kg previously, and the rise has yet to show signs of slowing down.

Indications are emerging that the price will hit $33 per kg before long, and one trader even suggested it could hit $35 per kg.

Some market participants are becoming wary, however, as it is not clear what will happen if and when the rally comes to an end.

“The big question is how long it will last – will it keep going up, and if not, will it stay as high as it is?” a producer said.

“I don’t think traders are building up stocks – they’re doing back-to-back deals all the time. This is why there’s a lot of movement,” he added.

Few market participants have taken positions, meanwhile, as it has been so difficult to call where the price will land.

“I think moly traders are out of the mindset of the boom years – this rally has taken people by surprise […] I don’t see anyone stepping in to take big positions,” a trader said.

“There’s not a lot of stock out there but you can’t get a feel [for what will happen] in the next month or two. You can’t put a short on for July, which is something that used to be quite common.”

The next move may be towards profit taking, although this is unlikely to happen before the rally begins to cool off.

“No one is shorting nearby – that’s too risky. No one has an agenda to knock the market down right now, but eventually it will turn.”

The break for Easter in Europe will leave the market quieter for a few days, and participants are loath to predict what will happen after that.

Molybdic oxide prices climbed to $13-13.40 per lb on Wednesday, compared with $12.25-12.50 per lb previously.

Claire Hack
chack@metalbulletin.com
Twitter: @clairehack_mb

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