The price of ferromolybdenum is now at a high level-Zhejiang Benji Stainless Steel Co., Ltd

Since the fourth quarter of last year, the share price of Golden Molybdenum has nearly doubled, and Luoyang Molybdenum has also achieved the largest increase of more than 55%. With the price of small metal molybdenum "taking off", the capital market has fully demonstrated the "love of molybdenum" for relevant concept stocks.

As an important small metal raw material in the upstream of the iron and steel industry, the price of molybdenum metal has stepped out of the trend of sharp rise in recent months and reached a high level in nearly 17 years under the double expectations of market supply reduction and downstream demand expansion. However, industry analysts believe that although the current price of molybdenum concentrate remains strong, the price of ferromolybdenum has declined. Under the background of excessive rise in the early stage, the market needs to be vigilant against the price downside risk caused by the falsification of positive expectations.

The price of ferromolybdenum is now at a high level

"Since the Spring Festival, the molybdenum price has remained high and volatile. In the middle and late February, the bidding volume and price of steel mills fell, and the downstream demand was weak, which to some extent hit the mentality of the molybdenum market to continue to hold up the price. As of February 28, the ex-factory price of ferromolybdenum was 335 million yuan/ton, down by 57500 yuan/ton from 392500 yuan/ton on February 1, down by 14.65%.

The recent analysis of CBC Metal Ferroalloy Network also pointed out that the trend of domestic molybdenum market was slightly differentiated. Although the ore price continues to rise, which resonates with the international molybdenum price rise again, the ferromolybdenum market is faltering, and the game between the upstream and downstream of the industrial chain is obvious.

Shortage expectations push up the market

"This round of increase in molybdenum began last August and September. The main reason is that the market expects a shortage of molybdenum supply in 2023." Regarding the performance of molybdenum metal in recent months, Cheng Xiaoyong, deputy general manager of Guangzhou Financial Futures Research Center, said that the downstream application fields of molybdenum are mainly steel industry and alloy materials. Last year, due to the overall downturn of the steel market, the steel mills suffered losses for most of the time. However, since the fourth quarter of last year, stimulated by the improvement of the domestic economic situation, the markets expectation of the improvement of the steel market has increased, which has also boosted the expectation of the demand for molybdenum metal.

In addition to its application in the field of stainless steel, metal molybdenum has also been used as a new material additive in the field of new energy vehicles, photovoltaic, wind power and other new energy fields in recent years because of its good corrosion resistance, friction resistance and other characteristics. The continued strength of the new energy market also provided a positive factor for the rise of molybdenum price. According to the data of the International Molybdenum Industry Association, the demand for molybdenum in wind power alone will reach 300000 tons by 2050, while the demand for molybdenum in all industries in the world is only about 270000 tons.

Molybdenum and copper ore are associated with each other. Since last year, under the influence of overseas copper strike and other factors, molybdenum metal showed a trend of reduction in global production last year, and the markets expectation of reduction in production continued to increase. In addition, the explosion of the new energy vehicle market has also formed a positive impact on the growth of steel demand, and multiple factors have pushed up the price expectation of molybdenum.

As for the stimulus factor of the strong performance of molybdenum price, Zhao Lili pointed out that the molybdenum metal market was in a supply-demand game situation in February. Although the international molybdenum price declined in February, it remained at a high level on the whole, supporting the domestic molybdenum price. At the same time, domestic mines successively shipped goods in February. The bid price of a mine in Luanchuan rose, driving the domestic molybdenum concentrate raw material price to continue to rise. In addition to the international price support, the domestic molybdenum price continued to be strong, and the increase was significant. In addition, at the end of January and the beginning of February, downstream steel plants entered the market for bidding, which released a large amount of ferromolybdenum market. Driven by demand, the ex-factory price of ferromolybdenum with tax in cash reached more than 380000 yuan/ton. All these supported the strong performance of molybdenum price.

Watch out for the fall of high prices

Is there room for the molybdenum price to continue to rise after offsetting the high point in the past ten years? In the interview, analysts were mostly cautious and had a wait-and-see attitude towards the high market. A person from a molybdenum industry company told the reporter of the Securities Times ? e Company that due to the comprehensive factors of domestic and foreign supply markets, the supply of molybdenum metal in the spot market is indeed a little tight at this stage, so the international market price is in an upward trend, but under the current high price, it is still prudent to wait and see.

At present, the price of molybdenum has been at a historical high. In the past half month, the molybdenum market has been basically high and volatile. Previously, the market expected that the profits of steel mills would be restored this year, but the prices of raw materials of steel mills have risen significantly recently, making the profit restoration of steel mills unrealized, resulting in a decline in the demand for molybdenum metal as an additive, and a certain decline in prices. As for the follow-up market trend, since March to May is the traditional peak consumption season, if the downstream demand cannot be fulfilled at that time, the molybdenum price will also face downward risks.

The decline of ferromolybdenum may be difficult to stop in the short term, and the price still has downward space and trend under pressure. As for the possibility of reversal and upward trend in the market at the beginning of March, it is also necessary to pay attention to the development and change of supply and demand situation, the delivery and transaction of mainstream molybdenum mines and the bidding performance of steel mills at the end of the month. According to the latest analysis of Baichuan Yingfu, the recent inquiries in the upstream and downstream markets of molybdenum are cold and the transactions are rare. The market prices of some products have been reduced but the demand has not been followed up. Most of the operators have left the market to watch the future development cautiously. It is reported that from the end of February to the beginning of March, some steel mills may enter the market again. The market is concerned about their volume and price performance, and it is expected that the molybdenum market will run in a weak position in the short term.

Zhejiang Benji Stainless Steel Co., Ltd.,