SMM September 12:
This week, the domestic molybdenum concentrate market operated under pressure. The news of a mine resuming production in Inner Mongolia, coupled with the bidding price of a mine in Henan being lower than expected, heightened risk aversion among some suppliers. Spot order shipments of molybdenum concentrate increased, and the transaction center of gravity for molybdenum concentrate shifted downward. During the week, ferromolybdenum market transactions were active, with domestic steel mills entering the market intensively, leading to higher trading volume. However, due to the softening of molybdenum concentrate prices, steel mills frequently drove down purchasing prices. Some traders with inventory chose to cash in profits, resulting in declines of varying degrees in both steel tender prices and spot order prices. The molybdenum chemical market maintained sluggish transactions throughout the week, with downstream restocking based on rigid demand, and the room for price negotiation shifted downward.
As of today, SMM 45% molybdenum concentrate closed at 4,500-4,530 yuan/mtu, and SMM 50% molybdenum concentrate closed at 4,530-4,560 yuan/mtu, down 50 yuan/mtu from the previous trading day and down 80 yuan/mtu from last Friday. Market wait-and-see sentiment was strong. However, based on the current supply situation from mines, only some increments are expected in Inner Mongolia in September, while production fluctuations in other regions are relatively small. With expectations of improved downstream demand, the overall supply of molybdenum concentrate in September remains tight. In the short term, some traders cleared inventory for cash, leading to a phase of looser supply and putting pressure on market prices. Future attention should be paid to the shipment situation of mainstream mines.
Today, SMM ferromolybdenum closed at 285,000-291,000 yuan/mt, down 1,500 yuan/mt from the previous trading day and down 5,000 yuan/mt from last Friday. During the week, steel tenders for ferromolybdenum entered the market intensively, with acceptance prices from mainstream large mills at 286,000-291,000 yuan/mt. However, due to the rapid pullback in molybdenum concentrate prices in the latter half of the week, steel mills mostly drove down purchasing prices. The opening prices dropped significantly compared to the first half of the week. After three consecutive days of decline in the molybdenum market, steel mills showed strong wait-and-see sentiment on Friday, with purchase willingness declining, and market transactions were deadlocked.
This week, the molybdenum chemical market was mainly in the doldrums with consolidation. SMM ammonium tetramolybdate closed at 272,000-274,000 yuan/mt, and SMM ammonium heptamolybdate closed at 276,000-279,000 yuan/mt, flat from the previous trading day but down 2,000 yuan/mt from last Friday. Overall market transactions shrank, with downstream restocking mainly based on rigid demand.
Overall, in the short term, the resumption of production at molybdenum mines and active shipments by some suppliers drove the molybdenum concentrate market downward under pressure. However, downstream demand also showed growth trends. With both supply and demand increasing in the molybdenum market, prices may fluctuate rangebound due to the tug-of-war between sellers and buyers. In the medium and long term, the production increment from the resumed operation of Inner Mongolia molybdenum mines will take time. In September, steel tender volumes are expected to show a significant increase driven by pre-holiday stockpiling, providing stable support for molybdenum market demand. It is expected that the room for correction in the molybdenum market in September will be limited.
