SMM April 15th News

Since April, the domestic molybdenum market has fluctuated at a high level. Demand in the downstream stainless steel and special steel markets has remained steady, and the total volume of steel tenders for ferromolybdenum has increased year on year. Coupled with high-priced shipments from domestic molybdenum mines at the beginning of the month, the ferromolybdenum industry has enjoyed strong cost-side support, driving up transaction prices. However, amid sharp cost increases, the industry still faces a high risk of price inversion.

Up to now, major domestic steel mills have launched tenders, with ferromolybdenum tender prices concentrated at 285,500–288,000 yuan per ton. Based on current mainstream molybdenum concentrate transaction prices, the industry incurs an average loss of about 2,000–3,000 yuan per ton. With high costs, steady steel mill demand but poor industry profitability, a trend of divergence has become prominent in the ferromolybdenum market.

Molybdenum Concentrate

Overall, prices have fluctuated at a high level with a slight correction toward the end of the month. At the start of the month, prices of molybdenum concentrate (45–55% grade) extended the rally seen at the end of March, quickly breaking through the threshold of 4,500 yuan per ton-degree. In tenders held by mines in Henan and Jiangxi on April 7, molybdenum concentrate transaction prices reached 4,510–4,530 yuan per ton-degree, 80–95 yuan per ton-degree higher than the starting prices, providing strong cost-side support.

Nevertheless, prices softened slightly in mid-to-late April due to weaker ferromolybdenum transactions and price pressure passed down by steel mills. As of April 15, molybdenum concentrate prices in some regions had fallen by 20 yuan per ton-degree from previous highs. Mainstream quotations for 45% molybdenum concentrate remained in the range of 4,500–4,530 yuan per ton-degree, still up more than 100 yuan per ton-degree from the end of March.

International molybdenum oxide rose in tandem, strengthening alongside domestic prices, keeping the import window for domestic molybdenum oxide closed. On the supply side, the sentiment of reluctance to sell and volume control to prop up prices among mines has not fundamentally changed.

Ferromolybdenum

Prices stabilized at high levels but transactions softened slightly, exacerbating the risk of price inversion. Ferromolybdenum prices trended “up first then steady with slower transactions” this month. Boosted by molybdenum concentrate costs at the beginning of the month, prices quickly rose to 288,000–290,000 yuan per ton, up around 1.4% week-on-week, with mainstream transactions concentrated at 286,000–288,000 yuan per ton.

From mid-to-late April onward, steel mills significantly pressed down prices in tenders. Tender prices set by several large steel mills were mostly 285,500–288,000 yuan per ton. Although over 1,000 tons of volume-supported transactions helped stabilize the market, overall tender prices edged down from earlier highs, leading to softer ferromolybdenum transaction prices and thin spot trading. Some traders offered cash prices as low as 286,000–287,000 yuan per ton.

With stubbornly high molybdenum concentrate prices and raw material costs rising faster than ferromolybdenum product prices, ferromolybdenum smelters have come under intense cost pressure, further heightening market inversion risks. Some enterprises have been forced to operate at a loss.

Demand Side

The downstream steel industry is the main consumer of ferromolybdenum, and the performance of the stainless steel sector directly affects ferromolybdenum demand. Since April, domestic stainless steel prices have rebounded slightly, with molybdenum-bearing grades such as 304 and 316L performing relatively well, leading gains supported by strong rallies in raw material prices including ferromolybdenum and nickel.

In terms of operating rates, major domestic stainless steel mills have maintained robust production schedules at historically high levels, with a slight increase in 300-series output and overall high operating rates, providing steady rigid demand support for ferromolybdenum.

Regarding ferromolybdenum steel tenders, bidding activities have been concentrated with considerable total volume this month. As of April 15, total domestic ferromolybdenum tenders from steel mills had reached 7,600 tons, with several large steel mills opening bids simultaneously. Ferromolybdenum pricing was mostly 285,500 yuan on cash basis – 287,000 yuan on acceptance basis per ton.

However, pressured by high costs in the steel industry, steel mills remain eager to press down tender prices, which are generally lower than spot market quotations. This has made it difficult for ferromolybdenum transaction prices to continue rising, slowing high-priced deals and also capping room for further gains in molybdenum concentrate prices.

Overall View

In early April, the domestic molybdenum market has been in a balanced game of “strong cost support and obvious demand constraints”. The market is expected to maintain a high-level fluctuation pattern in the short term, with key focuses on steel mill tender pricing, molybdenum concentrate supply and cost transmission.

On the supply side, the pattern of volume control and price support by mines is unlikely to change in the near term, so molybdenum concentrate prices are expected to stay high, offering rigid support for ferromolybdenum prices. On the demand side, robust production schedules for domestic molybdenum-bearing special steel and stainless steel in April, coupled with restocking expectations ahead of the May Day holiday, point to favorable demand outlook for molybdenum products such as ferromolybdenum and active transactions.

Supported by multiple positive fundamentals in the molybdenum market, prices are expected to remain largely in high-level fluctuation.