Spot price of SMM rare earths on July 1

SMM learned that overseas mine production cuts, extreme weather in South America, and declining ore grades and recovery rates were intensively discussed during a recent industry association meeting. These concerns strengthened expectations of tighter overseas molybdenum supply, stimulated some buying and pushed molybdenum oxide prices to around $34/lb Mo. Supply-side expectations continue to support prices, while some mine production, grade and recovery issues may not improve materially until around 2028. China’s market also remains firm, but elevated prices are discouraging chasing. Well-funded buyers, low-inventory users and producers with firm orders continue to purchase as needed, while processors mainly restock to maintain production.

Recently, LME copper inventories increased, the futures-spot structure shifted, and China's import arbitrage continued to climb. Today, downstream demand for imported copper in the Shanghai region clearly recovered, while supply was relatively tight. In the morning session, cargoes at Lingang were almost swept clean, and the spot copper premium rose rapidly.

The recent COMEX-LME copper price spread has narrowed, with the COMEX copper 2610 and LME 3M contract spread inverting, indicating a decline in the US pull effect on copper. On September 14, LME copper inventories stood at 249,225 mt, up 6,325 mt from the previous day. With the continued increase in LME copper inventories recently, the LME nearby contracts have shifted to a Contango structure and widened.