Biding Price of Ferromolybdenum by Steel Mills has Plummeted. Where Will Molybdenum Market Head for?

SHANGHAI, Oct 29 (SMM) – SMM understood that the bidding price for ferromolybdenum by domestic steel mills fell sharply again on October 28. A steel mill in Shanxi bid for 200 mt of ferromolybdenum, with the biding price of 148,000 yuan/mt by acceptance. Zhangjiagang Pohang Stainless Steel bid for 60 mt of ferromolybdenum with the bidding price of 147,000 yuan/mt, and the payment method is half acceptance and half cash. Prior to this, the mainstream market price was 152,000 yuan/mt.

SMM believes that the sharp drop in the bidding price is due to the significant price cuts and destocking by molybdenum concentrate companies, growing market pessimism. This drove users to push for lower prices. Meanwhile, the overall market demand remains weak. According to SMM statistics, the bid solicitation volume of ferromolybdenum by domestic steel mills stood at about 4,200 mt as of October 28, a decrease of about 50% compared with September. The prices of molybdenum products fell across the board previously, sidelining market participants. The current prices of ferromolybdenum have entered losses.

At the same time, some market participants said that the lower bidding prices may cause the prices of molybdenum concentrate to fall further. SMM understood that the prices of domestic molybdenum concentrate (45%) fell slightly on October 29, with the low-end of the market price falling to about 2,170 yuan/mt.

Where will the molybdenum head for? SMM believes that the domestic prices of molybdenum may still fall in the short term amid the current strong market bearish sentiment and weak demand. However, ferromolybdenum plants in Beijing-Tianjin-Hebei and surrounding areas may suspend production for one month before the Winter Olympics (January 2022). This is likely to support the prices of ferromolybdenum, adding to cost pressures. The ferromolybdenum prices may pick up in January.