SHANGHAI, Apr 21 (SMM) - According to General Administration of Customs, China's molybdenum concentrate imports in March 2022 were about 630 mt, a big drop of 48.1% compared to February. The main reason is that domestic molybdenum prices continued to rise in March, resulting in a significant reduction of China - overseas price spread, with a palpable reduction in import orders.
In mid to late March, domestic molybdenum prices continued to rise. The prices of domestic molybdenum concentrate moved all the way up from 2,465 yuan/mtu at the beginning of the month to a high of 2,690 yuan/mtu, an increase of 9.12%. In contrast, international molybdenum prices rose by only 2.12% in the month. By the end of March, domestic and international molybdenum prices have basically been flat with each other without taking into account the shipping costs, and some domestic molybdenum products prices are even slightly higher than international prices.
Domestic molybdenum prices rose mainly for two reasons. First, the outbreak of the COVID pandemic in Jilin, home to a great number of molybdenum concentrate enterprises, in March hindered the production and transportation of many local concentrate manufacturers like Daheishan Co., and there was a significant supply shortage of domestic molybdenum concentrate. The reduction in supply supported a continued rise in prices.
On the other hand, in late March, as domestic pandemic situation escalated, a number of steel mills, out of concerns for further transport restrictions and low in-plant ferromolybdenum stocks, reserved a large number of stocks in advance. According to statistics, in March, domestic steel mills ferromolybdenum bidding volume stood at about 18,000 mt, a year-on-year increase of nearly 100%. The great increase in downstream demand also supported the further rise in domestic molybdenum prices.
In April, the international molybdenum prices continue to fluctuate in a narrow range, while the domestic prices extend its upward trend in March. Even though the domestic prices have fallen slightly recently, they are still palpably higher than the international prices without taking into account the shipping costs. Thus, SMM expects the domestic molybdenum concentrate import volume to fall again in April.
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