Ryan's Notes Molybdenum
Ryan's Notes Jan/28/08
More moderate buying activity and dismal stock market
news did little to deflate moly prices last week. A US
mill reportedly purchased four trucks of FeMo for
February in the low $36s. It is assumed that the unsuccessful
bids were at $37 and higher, given Chinese
FeMo prices of $77 per kg. Another US mill bought
FeMo at $36. In Europe prices held steady at $78.50-
79 per kg for FeMo and $33-33.50 per lb for oxide.
Chinese suppliers reportedly have lowered their oxide
prices to $33, and some traders believe that they could
buy for under $33. Nervousness about the stock market
worldwide has made some sellers more cautious about
the future. Traders in Rotterdam appear to be holding
Chinese FeMo stocks, but once those stocks are sold
off, they will not be replenished at such low prices,
analysts say. As a result, many traders are counting on
moly prices dipping temporarily and then recovering.
Briquettes continue to command a large premium, with
sales reported at $34-34.25 per lb.
China's moly oxide exports fell 14% in 2007 compared to
2006, but its FeMo exports rose by 14% during the
same time period. Official statistics (material basis)
show exports for 2007 (with 2006 in parentheses) as
follows: technical moly oxide, 24,854 mt (28,786 mt);
FeMo, 21,133 mt (18,598 mt); pure oxides, 2,189 mt
(1,895 mt); ammonium molybdates, 1,485 mt (1,405
mt); sodium molybdates, 1,317 mt (1,423 mt); moly
metal, 4,518 mt (4,862 mt) and concentrates, 356 mt
(103 mt). It appears that Chinese exporters did not
exceed the export quota for the second half of 2007 of
12,800 mt (Mo) of moly oxide and ferromoly and
4,000 mt (Mo) of moly chemicals and moly metal.
China's regulatory commission for securities has given the
go-ahead for Jinduicheng Molybdenum Group to issue
its first public offering in Shanghai. The moly producer
hopes to raise $2.7-billion to boost production and
modernize.
Moly production at the Antamina mine in Peru fell 8% in
last six months of 2007 to 4,059 mt compared to 4,399
mt in the same period of 2006. In the fourth quarter,
production fell 12% to 2,009 mt from 2,272 mt.
It's better to be out wishing you were in than in wishing you were out.
"Markets can remain irrational longer than you can remain solvent". - John Maynard Keynes
