What is the impact of the shutdown of production in Jinduicheng Shaanxi molybdenum mining area affected by rainstorm on molybdenum city?

SMM7 March 23: according to SMM, torrential rain began to fall suddenly in Shaanxi area on July 22nd, and the highest rainfall in Jinduicheng mining area reached 400mm / h on the night of July 22nd. The mining area was completely affected by this and stopped production, and the specific resumption date was tentatively set.

According to relevant staff, the rain caused some pump drills in Jinduicheng mining area to be flooded, and the company completely stopped the mining of molybdenum ore and the refining of molybdenum concentrate since the early morning of July 23 because of staff safety and equipment conditions. As for the question of when to resume work, SMM learned that production in the mining area can resume within 3-4 days after the rain stops, and there is a high probability that it will resume within 7 days, but as the rain is still there at the time of publication, the specific recovery time has yet to be determined.

According to SMM, the Jinduicheng mining area in Shaanxi has a raw ore mining capacity of 37000 tons per month and molybdenum concentrate processing capacity before stopping production, which translates to 45 per cent molybdenum concentrate of about 3500 tons per month, accounting for about 15 per cent of the country's total output.

SMM data show that on July 23, the mainstream transaction price of 45% of molybdenum concentrates across the country is about 2310 RMB2,340 per tonnage, with the trading range unchanged from the previous day, with only a certain low price sparing sales, and the focus of transaction has moved up in the price range. It is understood that on the one hand, Jinduicheng Group has a sufficient inventory of molybdenum concentrate, which is still shipped normally, and the production of downstream products such as ferromolybdenum has not been affected. On the other hand, Jinduicheng Group's gold-molybdenum Ruyang mining area located in Luanchuan is in full production, and the current molybdenum mining and molybdenum concentrate processing capacity is 18000 tons / day, which plays a certain role in alleviating the suspension of production in Shaanxi mining area.

At present, it seems that if the Jinduicheng mining area in Shaanxi can resume production within 7 days, the market will not fluctuate significantly in the short term. However, after 7 days, the inventory of Jinduicheng Group has been exhausted, and if the mining area still cannot resume production, the molybdenum concentrate may be in a state of shortage again, and the molybdenum market price is expected to rise sharply.