Prices Rally Driven by Ore Shortages, Supported by Stable Demand

SMM News on July 25:

Recently, the molybdenum market has been fluctuating strongly, with prices of molybdenum concentrate and ferromolybdenum rising sharply. As of today, 45-50% molybdenum concentrate is priced at 4,020-4,050 yuan/ton-degree, up 12% from the beginning of the year, hitting a new high since August 2023. Holders are bullish on the market and have a strong psychology of reluctant selling, resulting in a small circulation of bulk goods. The high price in the market has even reached 4,080 yuan/ton-degree. For downstream ferromolybdenum plants, the cost pressure is relatively high. Enterprises mainly focus on delivering long-term orders, and many have stopped offering bulk orders, leading to chaotic market quotations. As of today, SMM's quotation for ferromolybdenum is 258,000-265,000 yuan/ton. Steel mills are actively inquiring, and the bidding prices have increased compared with the previous period.

In terms of upstream molybdenum concentrate: Domestic molybdenum concentrate remained strong this week. Major molybdenum mining enterprises have raised their sales prices, pushing up the market transaction prices, and low-priced goods are hard to find. In addition, a sudden accident at a copper-molybdenum mine in Inner Mongolia on Wednesday led to its shutdown, which further boosted the price of molybdenum concentrate. Holders in the market are reluctant to sell and are firm on prices. High-priced transactions of 45-50% molybdenum concentrate are around 4,050 yuan/ton-degree, but market supply is scarce, making procurement difficult. Since July, the output of domestic molybdenum concentrate has decreased compared with the previous period. Environmental inspections in regions such as Jiangxi have caused some small mines to reduce production. Coupled with the decline in the grade of domestic molybdenum concentrate, the industry circulation has remained tight, and any small news in the market can easily trigger concerns about the supply of molybdenum concentrate.

In terms of imported ores: With the rapid rise in domestic ore prices, overseas ore quotations have also increased. It is heard that a small amount of imported 50% molybdenum concentrate was transacted today at a price of 4,080 yuan/ton-degree. According to customs data, the total import volume of domestic molybdenum concentrate in June was about 4,722 tons, a year-on-year increase of 26.8% and a month-on-month increase of 38.4%, with a net import volume of 4,314 tons, a year-on-year increase of 48%. In 2025, domestic molybdenum concentrate has fluctuated at a high level, and the import volume of overseas molybdenum concentrate has increased significantly. In the first half of 2025, the total import volume of domestic molybdenum concentrate reached 29,300 tons, a year-on-year increase of 20%. The total net import volume of domestic molybdenum concentrate in the first half of the year increased by 19% year-on-year to about 24,600 tons. In terms of import sources, in the first half of the year, domestic molybdenum concentrate was mainly imported from Peru, Chile, Mongolia and other countries and regions, among which the total import volume from Peru reached 15,500 tons, accounting for 53% of the total domestic imports.

Downstream ferromolybdenum and molybdenum chemicals: Due to the long-term high-level fluctuation of molybdenum concentrate, downstream enterprises of ferromolybdenum and molybdenum chemicals have poor profitability, and some enterprises have been in a state of inversion for a long time, resulting in reduced willingness to take orders and lower operating rates in the industry. According to SMM estimates, the cost of domestic ferromolybdenum enterprises in July was about 256,000 yuan/ton, with an obvious industry inversion. Driven by costs, the price of ferromolybdenum has risen rapidly this week, but the bidding prices of steel mills have risen slowly. As of today, the bidding prices of major steel mills in Jiangsu, Hunan and other regions for ferromolybdenum are concentrated at 255,000-259,000 yuan/ton. Ferromolybdenum plants are optimistic about the future market, and many enterprises have stopped offering.

In terms of end demand: The volume of domestic ferromolybdenum bidding by steel mills in July was generally stable with a slight change month-on-month, and the market demand was acceptable. As of today, the total volume of ferromolybdenum bidding by steel mills has exceeded about 11,000 tons. Steel mills are optimistic about the future market of ferromolybdenum, with an increasing willingness to replenish inventories. Major steel mills have entered the market for bidding one after another, and the procurement pace has accelerated significantly. In addition, the recent positive response of the steel industry to the "anti-involution" policy and the start of the hydropower project in the lower reaches of the Yarlung Zangbo River on July 19 have stimulated the rise of stainless steel futures, warming up market sentiment. Inventories in the stainless steel industry have also shown a phased decline, and the maintenance of a stainless steel plant in Guangxi, originally scheduled for July 5, has been postponed, which is beneficial to the positive demand for ferromolybdenum.

Overall, the current round of rising in the domestic molybdenum market is stimulated by the tight supply of raw materials. With relatively stable downstream demand, it has driven the rise of intermediate products such as ferromolybdenum. In the short term, the tight situation of ore supply is difficult to ease, the cost-driven logic of the molybdenum market still exists, and the market will mainly operate at a high level in the short term. In the medium and long term, supported by policies such as "anti-involution", the prices of molybdenum-based steels such as stainless steel have been boosted, the industry continues to destock, steel mills have accelerated order taking in the context of rising prices, and the order receiving situation of some major steel mills for August has improved. The subsequent demand for products such as ferromolybdenum is well supported. There is no expectation of an increase in domestic molybdenum concentrate in August, and the prices of overseas molybdenum oxide and other products are fluctuating at a high level. Domestic molybdenum concentrate may remain tight, further supporting the high-level fluctuation of the molybdenum market. Future attention should be paid to the price guidance of molybdenum mine bidding and the operating situation of steel mills.