Weak Demand from Steel Mills Weighs on Molybdenum Market [SMM Molybdenum Daily Review]

SMM October 27 News:
The molybdenum market remained under pressure today. Ferromolybdenum tender prices continued to decline, dampening market trading confidence and dragging down molybdenum concentrate prices. Trading volume in the molybdenum market shrank today. Ferromolybdenum enterprises faced severe losses, leading to a decreased willingness to restock raw materials like molybdenum concentrate, with some producers suspending price quotations. Domestically, no mines offered molybdenum concentrate for sale. Spot orders traded around the online price, with the trading center for some spot orders shifting lower. Imported ore and molybdenum oxide prices were affected by weak overseas market prices, also seeing their trading centers move lower.

As of today, SMM 45% molybdenum concentrate closed at 4,360-4,390 yuan/mtu, and SMM 50% molybdenum concentrate closed at 4,390-4,420 yuan/mtu, down 10 yuan/mtu from the previous trading day. Spot prices for molybdenum concentrate remained relatively firm, exacerbating losses for ferromolybdenum plants. Ferromolybdenum plants showed poor purchase willingness. Amid market pessimism, some suppliers sold below the online price, but trading volume was limited.
Today, SMM ferromolybdenum closed at 272,000-276,000 yuan/mt, down 2,500 yuan/mt from the previous trading day. The total volume of steel tenders in October fell short of expectations. The ferromolybdenum market saw weak supply and demand. Steel mills in Shanxi and Shandong regions launched tenders, with market tender prices mostly in the range of 272,000-274,000 yuan/mt. Based on the current raw material cost of 45% molybdenum concentrate at 4,360 yuan/mtu, ferromolybdenum enterprises generally faced losses of 3,000-5,000 yuan/mt. Enterprises' willingness to sell and operate decreased significantly, and failed steel tenders gradually emerged in the market.

The molybdenum chemical market was mainly weak and stable today. SMM ammonium tetramolybdate closed at 263,000-266,000 yuan/mt, and SMM ammonium heptamolybdate closed at 267,000-270,000 yuan/mt, unchanged from the previous trading day. Overall market trading volume shrank, with strong wait-and-see sentiment downstream.

Overall, the molybdenum market has entered another phase of back-and-forth negotiations between upstream and downstream. Downstream steel mill demand is weak, with price-driven tenders prevailing. Upstream mines concentrated on sales in the first ten days of the month, leading to a phased release of industry inventory. Recently, market participants adopted a watchful stance with limited selling. Ferromolybdenum plants face significant cost pressure; industry profitability and operating rates can only be restored after a correction in the raw material market. In the short term, as domestic steel mills enter the off-season for operations and market demand is expected to remain weak, the molybdenum market is likely to stay under pressure. However, with winter approaching and potential maintenance and production cuts at northern mines, fluctuations in mine operations and their impact on industry supply and demand also warrant attention.