Molybdenum Concentrate Output in May Dropped Slightly amid Falling Prices and High Inventory

SHANGHAI, Jun 7 (SMM) - According to SMM data, the domestic molybdenum concentrate output in May was about 20,400 mt, which was about 450 mt lower than that in April, or a decrease of 3%, and the domestic molybdenum concentrate supply declined slightly.

SMM believes that two reasons contributed to the decline in operating rates of domestic mines. Firstly, in the domestic molybdenum market, the prices in May dropped greatly compared with those in April. During this period, some mines cut their production, and some mines proceeded with their annual maintenance, resulting in a decrease in molybdenum concentrate supply to a certain extent. Secondly, mines got high in-plant inventory as in April, molybdenum prices hit new highs continuously, and some mines maintained high operating rates. The poor trading in the second half of April and in early May resulted in a serious backlog of mine inventories. Later, the operating rates of mines were reduced to ease the pressure.

In June, the improvement of the pandemic situation in Jiangsu, Zhejiang and Shanghai and the issuance of national economic stimulus policies improved the market sentiment. In recent days, the transaction volume has increased, and the market confidence has gradually recovered. Besides, the prices of ferromolybdenum have rebounded to some extent. SMM expects that the molybdenum concentrate supply in June will increase with the improvement of demand from the steel mills.