Molybdenum oxide and European ferromolybdenum soared higher Thursday as sources said the market was being driven by extreme tightness for oxide powder.
The Platts daily dealer molybdenum oxide assessment climbed to $13.70-14.20/lb on Thursday from $13.30-13.75/lb. The Platts daily European ferromolybdenum (65% Mo) assessment rose to $33.65-34.20/kg from $32.50-33/kg, duty-paid, in-warehouse Rotterdam. Ferromolybdenum also soared in the US, with the Platts weekly assessment climbing Thursday to $16.80-17.50/lb, delivered, from $15.90-16.20/lb on May 1.
The Platts daily oxide price was last assessed at $14/lb on May 11, 2012, while European ferromolybdenum has not been reported higher than $34/kg since May 7, 2012. The US ferromolybdenum assessment is the highest it has been since March 8, 2012, when it was at $16.50-17.00/lb.
Market participants said oxide powder was scarce and increasingly difficult to source. Sellers were also said to be withdrawing offers as prices raced up through the day.
"We had an offer at $14.10/lb, but it's gone," one European trader said. "People are crazy, they're overdoing it now," he added.
"I can't find anything today," a second trader said. "I've been trying to buy something below $14/lb." He added he was seeing more inquiries from Italy, but pegged the increase in prices on a combination of demand and trader talk. "I'm worried. I just don't see $14/lb. It has to come down," he said.
Other sources were more bullish, with a third trade source forecasting oxide powder would hit $15/lb. "People said that $12 was resistance level. I see it going up higher now. Tight supply is the fundamental," the source said.
Oxide powder deals were reported concluded in Rotterdam at levels of $13.70/lb, $14/lb and $14.10/lb. A deal at $14.40/lb DDP Northwest Europe was also confirmed.
A Chinese producer said he sold oxide powder at $13.70/lb in Rotterdam but was now uncertain of where prices were, as he had not expected to see prices firm so quickly.
Inquiries from Europe were also reported by a second Chinese seller who said his spot supply was limited until the end of May or early June. Other sources from Asia were cautious on the price increases, with one Japanese trader suggesting that oxide powder prices at this price level were unsustainable and that prices would fall back.
EUROPEAN FEMO CHASING OXIDE
European ferromolybdenum chased oxide powder, jumping a dollar during the day and showed no signs of stumbling. A third European trade source said that he had offered $33.50/lb, duty-paid, in-warehouse Rotterdam at the start of the day, which was rejected, and said he later rejected bids at $33.65/lb.
Several deals were reported concluded at the end of the day at $34/kg and $34.20, in-warehouse Rotterdam.
The third European trader said he was receiving firm bids at $33.20/kg, but had no ferromolybdenum to offer.
A producer said he was also limited for his spot market sales.
He attributed the shortage in the spot market to better demand from steel mills. "I'm being told by plants they have order books expanding out to eight months now," the producer said.
Higher European ferromolybdenum prices also brought concerns over the possibility of exports from China. "Unless the domestic price in China improves pretty quickly, the flood gates will open," a fifth trade source said.
The third source agreed Chinese material in Europe was a concern, but questioned whether buyers would take a risk: "Who's willing to take a view on Chinese material with six-week delivery. Who knows where prices are going to be?"
US LOOKS TO FEMO IMPORTS
US ferromolybdenum traders said they were contemplating taking the risk of importing from China, even with the six-week wait time, because the market was so tight. "It's mostly supply-driven, but in the US, it's also demand," said a trader. "It's not just stainless, it's also because construction steel is coming back into it."
A second trader said it was becoming increasingly difficult for consumers to obtain offers of full truckloads. "Half-truck loads are easier and even 5 tons or 10 tons is not a problem, but that comes at a premium," he said.
The first trader reported making full truckload sales at $17.50, $17.75 and $17.90/lb on a delivered basis on Thursday. The trader also reported selling at $17.00 and $17.25 on Wednesday.
Several sources said the market had started the week at $16/lb, rose on Tuesday, again on Wednesday and then soared on Thursday.
A producer reported selling a less-than-full truckload quantity earlier in the week at $16.10, but now had no more material to sell spot. "We've also heard of sales well above $17 and I think some of the very high-priced sales are for very prompt dates, while a lot of it is because consumers are coming onto the spot market, because they've taken everything they can on long-term contracts for May and have to wait until June 1 before their next contract deliveries kick in," the producer said.
The producer source added that one long-term customer had asked for an additional load, "and we couldn't do it, so I'm sure they will be on the spot market very soon." The producer also said some customers were asking whether some June deliveries could be brought forward into May. "But that just causes problems further down the line," the source said.
A consumer said he was in the market for one truckload of ferromolybdenum on Wednesday, requesting quotes by close of business, valid overnight, and paid $17.30/lb delivered earlier on Thursday. "Nobody quoted me until after 4 pm yesterday and that was just one, which turned out to be the one I booked, and everyone else came in with their quotes within about five minutes of the 5 pm deadline. The highest quote I got was $18.25," the consumer said.
"I had been trying to go back to my suppliers to get additional loads on my contracts, but none of them could do it, and they weren't even able to do it on a spot basis, so I had to go to the market."
Another consumer said he had not been in the spot market this month, but would probably have to before long. "We've pretty much maxed out on the contract requirement for this month and we don't think we can get anymore on the contract, so we will have to go spot at some point. We're just figuring out whether we have enough to see us through the month, when the June contract deliveries start, but I don't think we do have enough."
But the second consumer was surprised at hearing of transactions above $17/lb. "That's a very big jump in a short space of time. It will do one of two things: it will either result in panic among consumers, which is the worst-case scenario; or else the mills will do their utmost to hold off buying in the hope that the sale side might give back some of their recent gains."
The high prices in the US are also attracting some imports, according to sources. A European trader reported making "several sales" at $17/lb on Wednesday.
