SHANGHAI, Mar 6 (SMM) - Molybdenum mines generally have high output rates due to the profit margins. Mines in the south have also fully resumed production after the Lantern Festival, which means that the output of molybdenum raw materials is very stable and sufficient.
Ferromolybdenum smelters undertook maintenance and shut down for 1-2 weeks during the Chinese New Year holiday. As most smelters had full production schedules, they resumed work quickly and returned to normal production after the Chinese New Year holiday.
Most steel mills maintained load-reduction production during the Chinese New Year holiday. Therefore, the demand for upstream molybdenum raw materials was relatively stable, which effectively supported the strong molybdenum price.
According to SMM, the order performance of downstream steel mills in the first quarter was acceptable, and due to the impact of the continued consolidation of molybdenum prices at a high level before the CNY, some steel mills had limited ferromolybdenum reserves. Therefore, large steel mills purchased ferromolybdenum actively after the CNY. As of the end of February, monthly ferromolybdenum bid solicitation by steel mills exceeded 12,000 tons, and the data is significantly better than the performance of the same period in the past three years.
The smelting cost of ferromolybdenum has reached a high level due to the increase in raw material prices. Coupled with the continuous follow-up of demand from steel mills, the possibility of a sharp correction in molybdenum prices is slim.
SMM analysis shows that molybdenum prices will fluctuate within a narrow range at the current price level in the near future.
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