Impact of Joint Statement by Steel Enterprises: Molybdenum Market in a Wait-and-See Mood with Weakening Transactions [SMM Molybdenum Daily Review]

SMM reported on July 31:

Today, the molybdenum market remained in a stalemate. On July 29, three domestic steel enterprises jointly issued a statement to suspend the procurement of ferromolybdenum, leading to a strong wait-and-see sentiment in the market and intense back-and-forth negotiations between upstream and downstream. Suppliers of ferromolybdenum were cautious and actively shipped goods. Demand in sectors such as molybdenum chemicals was sluggish, and prices remained stable compared to the previous trading day. Attention was focused on the auction results of Yunnan molybdenum mines tomorrow.
As of today, SMM 45%-50% and above molybdenum concentrate closed at 4280-4310 yuan/mtu, unchanged from the previous day. The market sentiment for molybdenum concentrate was cautious, and the enthusiasm for mine liquidation increased. A mine in Henan conducted a competitive bidding sale of 165 tons of low-grade molybdenum concentrate (containing 7.37% molybdenum and approximately 1.15% copper) at a transaction price of 3500 yuan/mtu (cash). Subsequent attention will be paid to the transaction situation of 128 tons of 40-45% molybdenum concentrate products planned to be sold by a mine in Yunnan on August 1. Today, downstream ferromolybdenum plants mainly focused on restocking based on rigid demand, with few spot orders being concluded.
Today, SMM ferromolybdenum closed at 273,000-280,000 yuan/ton, unchanged from the previous trading day. The transaction negotiations for ferromolybdenum were obvious. On July 29, three mainstream steel enterprises jointly issued a statement to suspend the procurement of ferromolybdenum. The monthly average tender volume of ferromolybdenum for these three enterprises is about 5000 tons, accounting for about 48% of the domestic monthly average tender volume of ferromolybdenum for steel enterprises. Affected by this, there was a strong wait-and-see sentiment among upstream and downstream ferromolybdenum enterprises. Other steel enterprises mostly postponed their procurement, leading to intense back-and-forth negotiations between upstream and downstream. Ferromolybdenum plants faced high costs, and enterprise quotations remained stalemate, with mainstream quotations centered around 275,000 yuan. Today, the tender-revealing price for a small amount of ferromolybdenum was around 271,500 yuan/ton.
Today, the molybdenum chemicals market mainly focused on catching up with the price increase in the raw material sector. SMM ammonium tetramolybdate closed at 262,000-264,000 yuan/ton, up by 10,000 yuan/ton from the previous trading day. Downstream demand was mediocre, and transactions were poor.
Overall, molybdenum concentrate prices surged sharply at month-end. Downstream sectors such as ferromolybdenum were constrained by weak downstream demand, and the price increase appeared slightly sluggish. There was obvious back-and-forth negotiation between upstream and downstream. Subsequent attention will be paid to the liquidity of the molybdenum concentrate market under sustained high prices and changes in demand from steel mills. In the short term, the molybdenum market will mainly consolidate at a high level.