SMM July 31 News:
In July, the domestic molybdenum market maintained a pattern of strong ore and weak ferromolybdenum, with the overall market mainly consolidating at highs. Profits along the industry chain continued to concentrate upstream. In July, the domestic molybdenum concentrates market saw frequent supply disruptions both in China and overseas. Coupled with stronger steel tender volumes for ferromolybdenum YoY and MoM, robust demand, and other bullish supply-demand fundamentals, molybdenum concentrates and ferromolybdenum prices repeatedly hit three-year highs, challenging previous peaks. According to SMM data, the average monthly price of 45% molybdenum concentrates in July was approximately 5,288 yuan/mtu, up 3.3% MoM. The average monthly price of ferromolybdenum in July was around 332,000 yuan per base mt, up 3.6% MoM. Molybdenum chemicals, molybdenum metal, and other molybdenum products also mainly rose in tandem. Entering August, molybdenum concentrate mines in Henan and other areas that have cut production are unlikely to fully resume production in the short term. Additionally, poor weather in South America and other factors have led to expectations of lower copper-molybdenum ore production. Meanwhile, the production schedule for downstream stainless steel such as 316 is improving, and the off-season for consumption is expected to gradually weaken. The supply-demand imbalance in the molybdenum market may persist in August, and prices are expected to mainly consolidate on a strong note.
Molybdenum Concentrates: In July, domestic molybdenum ore mining was subject to strict constraints from safety and environmental protection checks and mining quotas. Molybdenum concentrate enterprises in Henan and other regions continued to cut production. Molybdenum concentrate output in Henan in July fell by 1,500 mt compared with normal production levels in May, and an unexpected accident at a mine beneficiation plant in south-west China at month-end once again raised market supply concerns. SMM data showed that domestic molybdenum concentrate production in July fell about 1% MoM. Traders and miners generally held back from selling, and low-priced cargoes almost disappeared. Outside China, grade declines at major producing mines in Chile and Peru, along with persistent geopolitical and labor disturbances, kept the supply of molybdenum as a by-product from mainstream copper mines tight. BHP's molybdenum metal production in FY2026 fell 6.2% YoY, with output remaining low in Q4. Declining raw ore grades at the Escondida copper mine constrained incremental output. Codelco's molybdenum production in Q1 2026 fell 7.1% YoY, and capacity restoration at its major El Teniente mine was slow, with full-year production expected to continue declining. Large overseas miners saw limited molybdenum growth, leaving insufficient room for imported molybdenum concentrates to supplement the market. This continued to support a tight balance in the domestic spot molybdenum concentrates market and further bolstered the resilience of domestic spot prices. Customs data showed that China's total imports of other molybdenum ores and concentrates in H1 2026 rose 44.8% YoY to 42,448 mt (physical content). However, these figures included approximately 13,328 mt of extremely low-grade raw ore imported from Myanmar and other regions, and the total imports of conventional molybdenum concentrates showed a 0.7% decline YoY.
Ferromolybdenum: In July, the ferromolybdenum market continued to be pulled by both raw material costs and downstream demand, with transactions clearly diverging. The spot cash quotation range for 60% basis ferromolybdenum is 320,000-340,000 yuan/mt; smelters have long been in losses. Constrained by persistent losses, most small and medium-sized ferromolybdenum smelters have proactively controlled their operating loads, with the industry’s average operating rate staying low. Production scheduling based on demand and tight control of finished product inventories have become the mainstream strategy. Market transactions are highly dependent on steel mills' just-in-time procurement, speculative spot orders are very sluggish, and traders' willingness to replenish inventory at low prices is weak. July is mostly the off-season for the stainless steel and other industries, but steel mills are mostly preparing for August production. The ferromolybdenum tender volume in July mainly showed an MoM increase. According to relevant data, total ferromolybdenum tenders by steel mills in China reached 15,000 mt in July, up 19% MoM. Delivery dates for ferromolybdenum tenders entered in late July were mostly concentrated in early August, and amid strong expectations in the raw material market, cost pressure on ferromolybdenum plants became prominent.
Stainless steel: In July, China's stainless steel market was constrained by the downstream demand off-season and other factors, with prices mainly consolidating on a weak note. However, the industry as a whole was supported by strong cost support, and the industry mainly remained profitable. In early July, steel mills' ferromolybdenum tender prices were concentrated at 325,000-329,000 yuan/mt. In mid-to-late July, the tender price center moved up to 331,000-334,000 yuan/mt. Steel mill tender transaction prices generally and continuously stayed below market spot quotations. Currently, steel mills' raw material inventories remain low, and their procurement strategy is mainly to replenish stocks through monthly tenders on a just-in-time basis. The phenomenon of pre-building large inventories has disappeared. Demand structure has diverged: demand for alloy steel used in wind power, oil and gas pipelines, and high-end equipment remains resilient, providing just-in-time support; production scheduling for ordinary stainless steel and low-end construction machinery steel is weak, with no additional growth released, continuing to limit the upside room for ferromolybdenum prices. Some steel mills have started to gradually promote 2304 stainless steel to replace part of the 316L market.
Overall, the tight supply-demand balance pattern for molybdenum remains unchanged, and the market is likely to continue consolidating at highs. Supply side, domestic mines are unlikely to release significant growth in the short term, and overseas supply disruption risks persist. The downside support for molybdenum concentrates is relatively strong, limiting the room for a deep correction. The risk lies in the fact that if ferromolybdenum smelting losses widen further, smelters will reduce raw material procurement, forming a top-down negative feedback that suppresses ore prices. Demand side, although the 316L stainless steel market is in the off-season, most steel mills are supported by profits, and production scheduling is relatively stable. Moreover, steel mills may enter the market in late August to replenish raw materials for the September peak season, driving up ferromolybdenum transaction volumes. It is expected that the total steel mill tender volume in August will stay high. However, prices for stainless steel products such as 316 are already at historically high levels, and the sustainability of price transmission downstream needs to be verified, creating significant resistance for ferromolybdenum to break through upward. In the medium and long term, the commissioning cycles of new global molybdenum mines are lengthy, the tight supply-demand pattern is hard to reverse quickly, and the price center is more likely to rise than fall. Going forward, closely track the shipment pace of domestic mines, molybdenum oxide import port arrivals, monthly tender volumes and bid opening prices of mainstream steel mills, and be wary of the periodic pullback risk caused by high-level market sentiment fluctuations.
![Semiconductor market bucks the trend! Minor metals sector up nearly 3%, with Yunnan Tin and Yunnan Germanium leading the gains [SMM Flash]](https://imgqn.smm.cn/usercenter/xLlnY20251217171724.jpeg)