Downstream Pre-Holiday Restocking Nears Completion, Molybdenum Market Continues to Decline [SMM Molybdenum Weekly Review]

SMM September 26:
This week, the domestic molybdenum market remained weak. Molybdenum mines in Henan and Jiangxi sold cargoes, and the molybdenum concentrate market was dragged down by the rapid decline in ferromolybdenum prices, with the transaction center shifting downward. The ferromolybdenum market saw moderate steel mill tender volumes, but market sentiment was pessimistic. Suppliers' need for cash before the holiday increased, leading to looser market circulation. Steel mills mainly entered the market to drive down purchasing prices, and tender prices fell step by step. As of Friday, a steel mill in Jiangsu's ferromolybdenum tender price had dropped to 274,000 yuan/mt. Market sentiment was weak, and losses at ferromolybdenum plants widened.

As of Friday, SMM 45% molybdenum concentrate closed at 4,410-44,400 yuan/mtu, and SMM 50% molybdenum concentrate closed at 4,440-4,470 yuan/mtu, down 10 yuan/mtu from the previous trading day and down 120 yuan/mtu from the beginning of the month. During the week, several mines in Jiangxi and Henan sold via tenders, with bidding lows below online prices, and final transactions mostly close to the bidding lows. Ferromolybdenum plants faced increased cost pressure, lacked momentum to chase rising prices, and restocked mainly for rigid demand. Spot order market transactions were sluggish.
As of Friday, SMM ferromolybdenum closed at 276,000-280,000 yuan/mt, down 1,000 yuan/mt from the previous trading day and down 125,000 yuan/mt from the beginning of the month. Domestic steel mills' pre-holiday restocking was largely completed. Some steel mills entered the market for tenders during the week, with delivery dates mostly concentrated in late October. So far, total domestic ferromolybdenum steel tender volume reached about 12,000 mt, with limited WoW increase. Steel mills held strong expectations for price declines and restocked mainly for rigid demand. Some ferromolybdenum plants faced significant cost pressure. SMM estimates the industry's average cost for domestic ferromolybdenum plants this week was about 288,700 yuan/mt. Based on current tender prices, the industry faced severe losses. Domestic ferromolybdenum steel tender prices continued to weaken this week. As of Friday, tender prices had fallen to the 274,000-277,000 yuan/mt range. Ferromolybdenum plants participating in these tenders would only have a chance of profit if they could subsequently source molybdenum concentrate below 4,300 yuan/mtu.

This week, the molybdenum chemical market was mainly weak and stable. SMM ammonium tetramolybdate closed at 264,000-266,000 yuan/mt, and SMM ammonium heptamolybdate closed at 268,000-271,000 yuan/mt, flat from the previous trading day but down 8,000 yuan/mt from the beginning of the month. Demand from the chemical industry, such as catalysts, was sluggish, and ammonium molybdate market demand support was poor, with the market mainly experiencing gradual declines.

Overall, domestic molybdenum concentrate mines have not yet concentrated on sales, and market circulation increases are limited. However, dragged down by continuous price declines in downstream products like ferromolybdenum and poor performance in the international molybdenum market, transaction prices showed a downward trend. On the ferromolybdenum plant side, despite significant cost pressure, some traders sold at low prices to cash out. With pessimistic market sentiment, ferromolybdenum plants were relatively passive, and steel mills mainly drove down purchasing prices. The molybdenum market is expected to remain weak and consolidate before the holiday. After the holiday, attention should still be paid to the sales situation of mainstream mines and the restocking pace of downstream steel mills.