China’s FeMo price hits a 6.5-year high on robust sales
China’s molybdenum market continued to firm up in August, with Mysteel’s 60% ferromolybdenum price hitting a 6.5-year high since November 2011 on August 7, or up Yuan 6,000/tonne ($882/t) or 4.5% on week to Yuan 138,000/t including the 16% VAT, amid robust trading and bullish market sentiment, Chinese market sources shared on August 8.
“The continuing strengthening in FeMo price is mainly because of vibrant trading in the market and as a result boosted market sentiment. Chinese steel mills have been so keen to procure FeMo, and the procurement volume by the major steel producers already totalled 1,800 tonnes as of August 7,” a Beijing-based market source said.
Taiyuan Iron and Steel, a leading stainless producer in China, for example, just bought another batch of 650 tonnes of FeMo on Tuesday, partly to make up for the volume that it has failed to fulfil in its previous four procurements since June because of suppliers’ reluctance to sell amid price rises.
A market source from Southwest China’s Sichuan province added that Chinese traders have even “brushed aside the inquiries from the overseas customers, as domestic sales are far more profitable”.
Soaring domestic moly prices greatly benefited Jinduicheng Molybdenum Co, a leading moly producer headquartered in Shaanxi province in Northwest China, whose net profit surged 869% on year to Yuan 148.5 million in the first half of 2018, according to its preliminary results on August 7.
China’s FeMo price has also supported the moly concentrate price, which rose another Yuan 30/mtu or 1.7% on week to Yuan 1,820/mtu including 16% VAT for the 45% grade supplies as of August 7, according to Mysteel’s database.
A large-scale moly mine in Heilongjiang province in Northeast China has commenced sales for August on August 7 and it has sped up fulfilling those sales contracts signed in July due to some delays last month because of the local checks on environmental protection including waste water emission, Mysteel knows from market.
Written by Crystal Lu, lujq@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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