Market and product
MOLYBDENUM OXIDE: Moly oxide climbs to four-month high
Molybdenum oxide prices reached $12/lb on Friday, the highest level seensince early September as higher bids and some consumer purchases pushedprices higher.
The Platts daily dealer moly oxide assessment rose to $11.90-12.00/lb onFriday from $11.70-11.90 previously.
In South Korea, a container load of oxide powder was traded at $12/lbCIF Busan and details emerged of a container load sale in India on Thursdayat the same price. In the US, a steel mill was widely reported to have boughta truckload of oxide powder at a price equating to $11.90/lb.
Several participants said the market was generally quiet, largelybecause of extended new year holidays in China and Japan, with those marketsonly reopening on Friday.
While there were no official holidays in Europe in the latter half ofthe week, several participants appeared to be taking extended vacations forthe whole of this week.
In South Korea, buyers were bidding at up to $11.85 but were unable tobook at those levels, according to sources, while in Europe, there was acomplete absence of bids, offers or transactions.
The seller of the Indian business said earlier in the week he was notconvinced that $12 was obtainable. But he then got booked at that level thenext day, he said on Friday.
In the US, the truckload inquiry for oxide attracted offers at above$12/lb, up to $12.10, according to sources.
Also in the US, a consumer said he may need to go to the market for atruckload of oxide briquettes and expected to pay "well above $12.10" on adelivered basis. Based on the indications he had received on briquettes, theconsumer said he thought powder prices would have to be around $12 on adelivered basis.
Several sources expect market activity to pick up next week as moreparticipants return from vacations. "We should see some more activity andpossibly more inquiries," said a US trader. "But the price might pause for abit to see whether the expected demand materializes."
EUROPEAN DOLDRUMS
But a European trader was not as convinced that activity would pick up.He said the only activity was likely to be intra-trade and he estimated 98%of all consumer business in 2013 would be on long-term contracts on formulasat big discounts compared with previous years, leaving little room for a spotmarket. "There are not that many consumers that use oxide; there are morethat use ferromolybdenum. The ones that do use oxide tend to have really bigquantities and they've got it on long-term contracts with producers."
He said he saw no sign of demand from the steel industry picking up."I'm not sure that we're going to get a strong first quarter, let alone astrong first half," the trader said. "I had a truckload of oxide sold to aconsumer for January and they've asked it to be pushed back to February,which certainly isn't a good sign. .... And there are mills in Germany,especially around Duisburg, that are shut for the first two or three weeks ofJanuary, because they haven't got any orders."
The trader also noted that new production was "coming online whendemand is flat at best." He noted the ramp-up of the Climax pure molybdenummine in Colorado and the moly byproduct from the large Sierra Gorda coppermine, which is due to start production in 2014, was likely to add at least 60million lb of new supply to the market.
CHINESE SPOT PARTICIPATION SEEN AS LIGHT IN 2013
The European trader also thought Chinese participation in the spotmarket was unlikely to be large this year, unless there was an increase indemand from the steel industry. "If the world economy would just pick up, thenmaybe the Chinese would become more active. But I can't really see any needfor them to be active, given the subdued [demand] situation," he said.
Several sources reiterated that few traders had signed conversion dealswith moly oxide converters. "With traders having to pay $1.20 to convert toFeMo, and long-term contracts with consumers going at a premium of only$1.10/lb over the oxide price, it just makes no sense," said another Europeantrader.
But he said if things did turn around, "the converters would probablywelcome the traders back [for conversion deals] with open arms."
The Platts daily dealer moly oxide assessment rose to $11.90-12.00/lb onFriday from $11.70-11.90 previously.
In South Korea, a container load of oxide powder was traded at $12/lbCIF Busan and details emerged of a container load sale in India on Thursdayat the same price. In the US, a steel mill was widely reported to have boughta truckload of oxide powder at a price equating to $11.90/lb.
Several participants said the market was generally quiet, largelybecause of extended new year holidays in China and Japan, with those marketsonly reopening on Friday.
While there were no official holidays in Europe in the latter half ofthe week, several participants appeared to be taking extended vacations forthe whole of this week.
In South Korea, buyers were bidding at up to $11.85 but were unable tobook at those levels, according to sources, while in Europe, there was acomplete absence of bids, offers or transactions.
The seller of the Indian business said earlier in the week he was notconvinced that $12 was obtainable. But he then got booked at that level thenext day, he said on Friday.
In the US, the truckload inquiry for oxide attracted offers at above$12/lb, up to $12.10, according to sources.
Also in the US, a consumer said he may need to go to the market for atruckload of oxide briquettes and expected to pay "well above $12.10" on adelivered basis. Based on the indications he had received on briquettes, theconsumer said he thought powder prices would have to be around $12 on adelivered basis.
Several sources expect market activity to pick up next week as moreparticipants return from vacations. "We should see some more activity andpossibly more inquiries," said a US trader. "But the price might pause for abit to see whether the expected demand materializes."
EUROPEAN DOLDRUMS
But a European trader was not as convinced that activity would pick up.He said the only activity was likely to be intra-trade and he estimated 98%of all consumer business in 2013 would be on long-term contracts on formulasat big discounts compared with previous years, leaving little room for a spotmarket. "There are not that many consumers that use oxide; there are morethat use ferromolybdenum. The ones that do use oxide tend to have really bigquantities and they've got it on long-term contracts with producers."
He said he saw no sign of demand from the steel industry picking up."I'm not sure that we're going to get a strong first quarter, let alone astrong first half," the trader said. "I had a truckload of oxide sold to aconsumer for January and they've asked it to be pushed back to February,which certainly isn't a good sign. .... And there are mills in Germany,especially around Duisburg, that are shut for the first two or three weeks ofJanuary, because they haven't got any orders."
The trader also noted that new production was "coming online whendemand is flat at best." He noted the ramp-up of the Climax pure molybdenummine in Colorado and the moly byproduct from the large Sierra Gorda coppermine, which is due to start production in 2014, was likely to add at least 60million lb of new supply to the market.
CHINESE SPOT PARTICIPATION SEEN AS LIGHT IN 2013
The European trader also thought Chinese participation in the spotmarket was unlikely to be large this year, unless there was an increase indemand from the steel industry. "If the world economy would just pick up, thenmaybe the Chinese would become more active. But I can't really see any needfor them to be active, given the subdued [demand] situation," he said.
Several sources reiterated that few traders had signed conversion dealswith moly oxide converters. "With traders having to pay $1.20 to convert toFeMo, and long-term contracts with consumers going at a premium of only$1.10/lb over the oxide price, it just makes no sense," said another Europeantrader.
But he said if things did turn around, "the converters would probablywelcome the traders back [for conversion deals] with open arms."
Source:http://www.platts.com/
