Chinese ferromolybdenum price falls 7% on weak buying interest

Shanghai 29 October 2009 02:41

Chinese molybdenum concentrate prices fell 150 yuan ($22) per tonne, extending weeks of declines caused by poor demand.

Prices dropped to 1,900-1,950 yuan ($278-286) per mtu, from 2,050-2,100 yuan per mtu last week.

"We haven't purchased any concentrate recently as prices dropped very quickly and we also have some inventory which will last until next month," said a ferro-molybdenum producer in Huludao, Liaoning province.

Domestic ferro-molybdenum prices also dropping rapidly these days as no buyers want to buy, the ferro-molybdenum producer added.

"Most stainless steel mills are unwilling to buy ferro-molybdenum because of poor sales for their own products. And the anti-dumping issue on Chinese stainless steel pipe is also making them hesitant to buy ferro-molybdenum," said a major ferro-molybdenum producer in Luoyang, Henan province.

Ferro-molybdenum is now trading at around 126,000-131,000 yuan per tonne, down as much as 6,000 yuan from last week, according to producers.

While demand is thin, supply is more than adequate, trader said.

"There is a lot of concentrate and ferro-molybdenum inventory in the market now, so some ferro-molybdenum producers have cut operating rates to reduce output," said a major molybdenum concentrater producer in Shanxi province. Many molybdenum miners are producing at loss now, he added.

Another ferro-molybdenum producer in Liaoning province told MB his company has cut production and is only supplying long-time customers in order to maintain relationships.

Market sentiment was also hit by lower European molybdic oxide prices, the Huludao producer said, adding that he has no intention of buying molybdic oxide for the time being. MB's prices for drummed molybdic oxide fell to $10.50-11.50 per lb on Wednesday.

China imported 5,067 tonnes molybdenum concentrate and molybdic oxide in September, down 17% month-on-month, taking nine-month imports totalled 51,350 tonnes, according to customs.

Most market players expect further price declines as there is no sign of buyers returning in any great number to make purchase in the near future.

"Concentrate prices may drop to 1,700-1,800 yuan or even to 1,500-1,600 yuan," the second Liaoning producer said.

"In the current market, I reckon that concentrate prices could drop to 1,700-1,800 yuan in the coming months," said the Luoyang producer.