SHANGHAI, July 26 (SMM) - Domestic molybdenum prices continued to fall since late-June. According to SMM, as of July 26, domestic molybdenum prices fell from 2,740 yuan/mtu by 280 yua/mtu or 10% to 2,460 yuan/mtu. Why did the prices continue to fall? Will the prices rise in August?
SMM believes that there are mainly three reasons that led to the continuous decline in molybdenum prices. Firstly, the operating rates of steel mills continued to remain low due to the weak downstream demand. At the same time, as the steel prices continues to fall, steel mills were more motived to force down the ferromolybdenum prices. Therefore, the poor ferromolybdenum market affected the molybdenum concentrate and other molybdenum products markets. Secondly, the poor market sentiment had a negative impact on the prices amid the pandemic and poor economic environment. Finally, affected by the recent sharp drop in the international molybdenum prices, the domestic molybdenum market lacked enough confidence to hold the prices firm. In addition, as the import window opened, there were more low-priced goods in the domestic market, which further intensified the competition.
SMM believes that the domestic molybdenum market is unlikely to improve significantly in August, mainly because the production schedules of downstream steel mills will not improve significantly in August. Steel mills are still bearish about the follow-up market. At the same time, the market sentiment was relatively poor due to the weak economic environment. Therefore, SMM predicts that the domestic molybdenum prices will further decline in August and may rebound amid the traditional seasonal high in September and October.
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