Post-Holiday Molybdenum Ore Rebounds, Ferromolybdenum Tender Center Rises [SMM Molybdenum Daily Review]

SMM Jan. 5:

Post-holiday, the domestic molybdenum market rebounded rapidly. The price center for molybdenum concentrate transaction prices moved up significantly, driven by strong cost factors. Ferromolybdenum enterprises held back supply and were reluctant to sell, keeping their quotations firm. Steel mills found it difficult to negotiate prices in tenders, and actual transaction prices mainly moved higher. On Jan. 4, a steel mill in Guangdong awarded a tender at 255,000 yuan/mt, while mainstream market quotations were concentrated in the range of 255,000-258,000 yuan/mt. Downstream steel mills exhibited strong wait-and-see sentiment, and their pace of entering the market for procurement slowed down.

As of today, SMM's 45% molybdenum concentrate closed at 3,870-3,900 yuan/mtu, up 140 yuan/mtu from pre-holiday levels. Today, a mine in Jilin sold 50% molybdenum concentrate at a transaction price of 3,960 yuan/mtu. Additionally, a mine in Luoyang is scheduled to conduct an online tender on Jan. 6 to sell 810 mt of 45-55% molybdenum concentrate, with a minimum bidding price of 3,870 yuan/mtu. High prices from mines boosted market sentiment. Overseas molybdenum oxide market offers rose today, with a transaction reported at $22.9/lb Mo at Tianjin Port. Combined with reduced imports of raw materials, this somewhat improved the supply-demand structure of the domestic molybdenum raw material market.

Today, SMM ferromolybdenum closed at 255,000-258,000 yuan/mt, up 8,000 yuan/mt from pre-holiday levels. Following the rapid market rebound, steel mills maintained a strong wait-and-see stance. However, ferromolybdenum enterprises enjoyed strong cost support, leaving relatively small room for price negotiation. Today, some steel mills entered the market for small-volume tenders, but mainstream steel mills had not yet taken procurement action. Against the backdrop of the off-season in markets like stainless steel, steel mills had limited acceptance for high-priced raw materials. Subsequent attention should be paid to the tender pace of mainstream steel mills.

Short-term, high-priced transactions for international molybdenum oxide and strong price support in the domestic molybdenum raw material market drove a strong rebound in the upstream molybdenum market, boosting downstream confidence. Medium and long-term, however, close attention should still be paid to the follow-through of firm orders from steel mills and the operating rates of downstream sectors.