SHANGHAI, May 26 (SMM) - Molybdenum prices plummeted in China this week. According to SMM data, as of May 26, the mainstream transaction prices of molybdenum concentrate (45% Mo) in China stood at 2,580 yuan/dmt, down 130 yuan/dmt, or 4.8%, from the previous week. At the same time, according to some participants, due to the successive declines, the traded price of some bulk cargo transactions fell below 2,550 yuan/dmt.
SMM believes that the main reasons for the continuous decline of domestic molybdenum prices are as follows. First of all, the pandemic situation in recent days has weakened the economy and the traders’ confidence. The participants generally hold a bearish outlook for the future market, thus suppressing the prices to some extent. Secondly, the steel market remains volatile. The inventory of stainless steel enterprises is increasing, meanwhile, they bore pressure from the dropping steel prices. As a result, steel mills cut their purchasing volume and prices of ferromolybdenum, which further forced the molybdenum concentrate prices to fall. Thirdly, the pandemic situation in Jiangsu, Zhejiang and Shanghai seriously has stricken the molybdenum metal consumption. According to SMM research, orders from molybdenum metal enterprises in these places have decreased significantly, which makes the molybdenum prices drop.
As the economic recovery and the increase in the operating rates of steel mills still take some time, SMM believes that the domestic molybdenum prices are unlikely to improve in a short time. With the easing of the pandemic situation and the measures taken by the country to stimulate the economy, it is optimistic that the domestic molybdenum prices will rebound in mid-July.
Disclaimer:
The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.
