The six-week rally in molybdic oxide and ferro-molybdenum prices came to an abrupt end late last week after European consumers did not return to the market as many traders had hoped.
While those hopes have been dashed this week, market participants still expect stainless mills to buy again in September though.
Drummed molybdic oxide dipped to $17.20-18 per lb on Wednesday from $17.80-18.30 last Friday, though few deals were reported to MB. Prices dropped for the first time in six weeks last Friday.
Ferro-molybdenum prices have rallied by more than 60% and molybdic oxide prices by nearly 80% since the start of June due to Chinese buying and speculative position-taking by traders ahead of an anticipated recovery in European consumer demand.
But enquiries have dried up and prices have fallen back in the past ten days.
“We’ve not done anything this week – it’s by far the quietest week we’ve had in months,” said a trader.
“There is no end user demand in Europe at all at the moment,” said a second trader, who told MB that offers were still coming from parts of Asia in the lower half of the new range.
Market participants expect activity and prices to pick up in the next week and into the fourth quarter as consumers return, though some are sceptical there will be enough demand to immediately push prices back above $18 per lb.
“We may see a rebound in the next week or ten days, but I’m not sure yet,” said a producer. “I expect activity to pick up, but it might not be strong enough to raise prices.”
For prices to rise again, Western consumers will need to buy in earnest. Traders have told MB this month that some Chinese buyers are shipping material back to Europe to take advantage of recent price increases (MB Aug 10).
“There are a few containers being offered from China – material that was bought in May or June,” said the second trader.
Ferro-molybdenum basis 65-70% dropped to $39-40 per kg on Wednesday from $40-42 previously, with many traders holding on to what material they have in the hope that the drop in prices will only be temporary.
“In the last two days, I’ve sold just two tonnes at $39 [per kg],” said the second trader. “But I’m not a fan of giving away material at lower prices, and will only start offering again when prices go back above $40 [per kg].”
MOL Price at posting:
$1.45 Sentiment: Buy Disclosure: Held
