Molybdenum--Fuelled by traders

摘要

Sources in China indicate that the current lift in prices is probable unsustainable. Firstly, our contacts suggest that the market in China has not undergone any marked improvement, meaning real demand remains weak. Indeed, many expect that a real uptick will not be felt before the second quarter. Market participants suggest that mills in China are mostly operating well below capacity (more or less in line with Q3). As a result their ferroalloy requirements have not significantly improved, and ferroalloy plants are largely working on a hand to mouth basis. With this lack of improvement in real demand our sources point to domestic traders in China as the main reason for the price increases. Naturally there is a limit to how long speculative purchasing can bolster prices and we would therefore expect prices to ease again as we approach the Christmas holidays.