China’s special alloys market still follows overall soft trend

Still characterized by an overall softness, China's domestic special alloys market registered a sharp drop in prices of both ferromolybdenum and ferrovanadium over the past week. The domestic ferromolybdenum market accelerated its downward movement during the week in question; meanwhile, the local vanadium alloys market remained on its declining trend, but with a certain improvement observed in market demand.

The Chinese ferromolybdenum market speeded up its downward movement in the past week. By the end of last week, the mainstream prices of ferromolybdenum in Jingzhou had decreased RMB 10,000/mt ($1,466/mt) to the level of RMB 125,000/mt ($18,328/mt), while the market prices of molybdenum concentrate (45 percent) were down RMB 150/mtu ($22/mtu) week on week to RMB 1,850-1,900/mtu ($271-279/mtu). Meanwhile, European market prices of ferromolybdenum (60 percent Mo) are at $25-27.5/kg Mo, while prices of molybdenum oxide in this market are at $10.7-11.5/lb.

Despite a certain increase in market trading, ferromolybdenum prices in the Chinese market declined at a more rapid rate during the past week. Many Chinese mills are reported to have made purchases, but generally at lowered levels, with purchase prices even falling to RMB 120,000/mt ($17,595/mt) according to some mills. In this context, ferromolybdenum market prices have come under significant downward pressure in recent days. Meanwhile, given the sliding price levels in the current ferromolybdenum market, the production operations of molybdenum concentrate producers are also facing increasing pressure. If the market continues to follow its soft trend, concentrate producers are likely to suspend production in the near future. Looking at the current situation, the Chinese ferromolybdenum market is expected to continue its bearish performance, with a recovery appearing unlikely in the short term.

Meanwhile, the Chinese ferrovanadium market continued to decline during the past week. Domestic quotations of ferrovanadium (50 percent) have fallen by RMB 2,000/mt ($293/mt) to the range of RMB 90,000-92,000/mt ($13,196-13,490/mt), with vanadium pentoxide (98 percent flakes) down by RMB 3,000/mt ($440/mt) to RMB 82,000/mt ($12,023/mt). Meanwhile, in the international market, quotations of vanadium pentoxide (98 percent flakes) in Europe are at $6.7-7.5/lb, while market quotations of ferrovanadium (V70-80%) are €23-24.5/kg.

Although domestic mills have been concluding purchases of ferrovanadium in recent days, market prices in China have failed to see a halt to their declining trend, with mills and traders both cutting their purchase prices sharply. A Jingzhou-based ferrovanadium producer has stated that, given the heavy losses incurred, producers are maintaining their production operations with great difficulty. Due to the previous high costs of vanadium pentoxide, producers have registered overall losses given the current sales levels. Generally speaking, ferrovanadium prices in China are not expected to achieve stability in the coming period but instead will continue to fall.