Molybdenum Mine Transaction Prices Turn Lower, Molybdenum Market Prices Ease [SMM Molybdenum Daily Review]

SMM November 19:

The molybdenum market retreated after a rapid rise this week. On Monday, a mine in Inner Mongolia sold products via tender, driving the transaction price of 45% molybdenum concentrate up to 3,800 yuan/mtu. This lifted the spot order transaction center by 50 yuan/mtu to around 3,760 yuan/mtu. However, downstream ferromolybdenum plants faced severe losses and had limited capacity to absorb high-priced molybdenum concentrate. On Tuesday, a mine in Heilongjiang sold 50% molybdenum concentrate at a spot transaction price of 3,700 yuan/mtu, which was below the prevailing market price, leading to weakened transaction confidence. Spot order transaction prices fell again to below 3,700 yuan/mtu. Affected by the softening of raw material prices, the ferromolybdenum market also showed signs of stagnating price increases.

As of today, SMM's 45% molybdenum concentrate closed at 3,670-3,700 yuan/mtu, down 60 yuan/mtu from the previous trading day and down 30 yuan/mtu from last Friday. Concentrated sales from mines, combined with earlier large inflows of imported material, led to ample circulation of molybdenum concentrate in the market. Low ferromolybdenum transaction prices and industry losses dragged down the significant rebound in the molybdenum concentrate market. However, with the clearance of mainstream mine inventories and production cuts or suspensions at some mines in Luanchuan due to environmental protection reasons, subsequent attention should be paid to the circulation situation in the molybdenum concentrate market.

This week, the price center of ferromolybdenum moved upward. Supported by earlier continuous declines in industry operating rates and strong cost-side support, the transaction center for ferromolybdenum shifted higher. On Monday, mainstream steel mills entered the market for tenders, with some low-priced bids failing. On Tuesday, a steel mill in Fujian tendered for ferromolybdenum, with a cash transaction price of 241,000 yuan/mt, up 12,000 yuan/mt WoW. Some steel mills, optimistic about the future market, increased their participation, leading to improved ferromolybdenum transactions. However, as mine-side transactions turned lower again, the market entered a divergent state today, with steel mills driving down prices in tenders. Steel mill tender prices revolved around 241,000-245,000 yuan/mt. As of today, SMM ferromolybdenum closed at 243,000-250,000 yuan/mt, flat from yesterday but up 9,500 yuan/mt from last Friday.

Overall, after previous high fluctuations, the molybdenum market placed significant pressure on downstream molybdenum demand. Entering Q4, downstream steel mills entered the traditional off-season. Coupled with disruptions from the overseas low-priced molybdenum raw material market and the concentration of multiple bearish factors, molybdenum market prices were dragged down. In the short term, the market is expected to fluctuate rangebound. Subsequent attention should be paid to mine shipments and steel mill operating rates.