Moly keeps moving up...Moly prices rise as consumers start to come back
January 13, 2010
European molybdenum prices bounded upwards on Wednesday as European consumers returned to a market that has seen hectic trader business since the start of the year.
Drummed molybdic oxide climbed to $15-16 per lb from $13.50-14 per lb previously, and offers are already in the market above the new range.
“Moly oxide has been done at $16, and the next offers are already at $16.25,” a trader said.
A consumer bought two containers between $15 and $15.25 per lb, while a second trader sold a container of briquettes at $16 per lb.
“I sold a container at $13.95 and one at $14 on Friday, then sold a container of briquettes at $16 on Tuesday – that’s just two days difference!” the second trader said.
Prices have shot up this week despite Chinese buyers looking to sell material back into the market, having bought heavily in the first week of the year at lower prices.
“I just emailed a Chinese trader with stocks in Rotterdam, and for prompt release he’s offering $16,” the consumer said. “He was quoting $15.30 on Monday."
With consumers returning to the market and European traders looking to stock up, material returning from Chinese traders has not alleviated the tightness in the market.
“I have a basket of four or five regular suppliers. One said he couldn’t offer and another had only ten tonnes,” the consumer said.
Market participants polled by MB at the start of the year predicted that prices would rise in a tight market over the first quarter, but the speed of that rise has surprised many.
“It’s not that the price is going up or that the market is getting tight; it’s the timing,” a producer said. “I did not expect a $5 increase [in a week].”
Meanwhile, western-grade ferro-molybdenum rose to $36-38 per kg from $33-34.50 previously, as consumers returned to the market for big tonnages, rather than the smaller parcels they were buying at the end of last year.
“There was a lot of inter-trade buying last week and now that the trade has stocked up, we’re starting to see consumer enquiries this week,” the first trader said, adding that he had received three enquiries from consumers totalling 120 tonnes.
“Most mills only opened on Monday, but they’ve come in with big enquiries, and no one is holding much material,” he said.
Ferro-molybdenum’s price rise has lagged that of molybdic oxide since Friday, and some in the market were sceptical that high oxide prices could be sustained. But with ferro-moly’s rise, the conversion equation now makes much more sense.
“Yesterday morning I thought that, sooner or later, we would see a correction [in molybdic oxide]. When oxide is at $15 [per lb] and you can’t get rid of ferro-moly for more than $35 [per lb], it doesn’t make sense,” a third trader said.
“But when I heard that traders are facing higher ferro-moly offers, then I have to change my mind,” he added. “If both commodities are rising together, then I believe a lot more in the stability of the rally.”
With an oxide price of $15.50 per lb, ferro-moly needs to sell at $38 per kg for converters to be profitable, one told MB.
Copyright © Metal Bulletin Ltd.