What is the reason for the sharp reduction in China's molybdenum concentrate imports in June?

Customs data show that in June 2021, China imported 2601 tons of molybdenum concentrate, a decrease of 36.86 percent from the previous month and 50 percent from the same period last year.

Compared with the same period in 2020, the sharp decrease in China's molybdenum concentrate imports in June 2021 was mainly due to the influence of Chile. According to SMM, affected by the epidemic, the Chilean government began to close the border on April 5 this year, allowing international transport only for urgent, humanitarian or medical purposes. This has led to a significant reduction in China's imports of molybdenum concentrate from Chile. According to customs data, China imported 791 tons of molybdenum concentrate from Chile in June 2021, compared with 2311 tons in the same period last year, a decrease of 1520 tons, while China's total imports of molybdenum concentrate fell by 2600 tons in June compared with the same period last year, accounting for nearly 60 per cent. In addition, the output of molybdenum concentrate from other leading international mining companies, such as Rio Tinto, has been reduced to varying degrees, resulting in a significant reduction in the import of molybdenum concentrate in China.

Compared with May 2021, the sharp decrease in imports of molybdenum concentrate in June was mainly due to the influence of international molybdenum prices. SMM learned from market participants that the international molybdenum price in the first half of June was stimulated by the increase in European demand for ferromolybdenum and the reduction of molybdenum concentrate and molybdenum oxide raw materials, and the price continued to rise, reaching a peak of about 2800 yuan / tonnage in mid-June, while the domestic molybdenum concentrate trading price was around 2200 yuan / tonnage in the same period. In front of the huge price difference, Domestic buyers have turned to the domestic market, resulting in a significant reduction in imports.

It is understood that on July 12, the Chilean Ministry of Health confirmed that it would continue to extend the border closure policy until July 25, and there was also news in the market that Chile would resume normal trade in August. SMM expects China's molybdenum concentrate imports to remain low in July.