Global molybdenum oxide prices eased slightly in Asia, Europe and the US this week amid limited spot market business as consumers and suppliers concentrated on negotiating long-term contracts for 2011, market participants said.
The Platts Dealer Moly Oxide global benchmark price assessment fell to $15.80-16.10/lb on Thursday from $15.90-16.20/lb a week earlier. The assessment, based on dealer to consumer business, saw most of the activity in Europe this week, although price variations across the three main geographic regions were minimal.
In Europe, a stainless steel producer bought two 20 mt lots of moly oxide powder for plants in the UK and Italy, both at $16.10/lb delivered for prompt release.
Elsewhere, a converter bought two container loads of powder on an in-warehouse Rotterdam basis. He said he had tried to buy at under $16.00 but was unable to.
However, another European trader said he had sold a 20 mt parcel to a consumer at $15.80/lb, basis in-warehouse Rotterdam. The same trader also said he had sold a 20 mt to a consumer at $15.75/lb, but the deal was an outlier compared with the price levels where most business was seen.
Not much business was seen for briquettes, although a German consumer was understood to have bought a truckload of briquettes at $16.40/lb, which was said to have netted back to $16.00/lb for powder on an in-warehouse Rotterdam basis.
Bids at below $15.80 were seen in the market, but only one claimed to have transacted at under $15.80. FOCUS MOVES TO LONG-TERM BUSINESS
Several participants said there was more confidence in the market among consumers about booking long-term contracts for both moly oxide and ferromolybdenum.
"We've been doing more long-term purchases, because we don't want to be completely exposed to the spot market, which we were to a large degree this year," said a raw materials buyer at an Austrian consumer. "We've done, or will be doing, about 40-50% on annual contracts [for 2011]; that includes FeMo and moly oxide and also ferrovanadium."
A molybdenum oxide converter agreed that he had seen more confidence in the long-term market, adding that his company planned on doing around 60% of its business on long-term contracts this year and 40% on the spot market. "There have been more requests from the [steel] mills to buy on a long-term basis, so we have done more this year than last."
But a UK trader said that while there was more long-term business going on compared with this time last year, it was not back up to pre-recession levels. "The converters and producers used to like to do 90% long-term," the trader said. "But the collapse forced them onto the spot market and I think quite a few of them realize now that the spot market is actually not so bad for them.
Several participants attributed the lack of spot market business to ongoing negotiations on long-term contracts.
"People are definitely focused on the long-term [business], so there's not a lot of spot market activity going on," said a US trader.
In the US, just 10 mt of business was seen, involving one seller but more than one buyer at $16.10/lb. However, some producer and trade sources pegged the market as high as $16.30-16.40/lb, although several sources said such levels were only possible for briquettes.
In Japan, a consumer bought two 20 mt lots from European traders at $16.00/lb CIF. MARKET SEEN CONSOLIDATING AT CURRENT LEVELS
Other sources attributed the lack of spot market activity to consumers managing year-end inventories.
While prices have eased slightly this week, the general sentiment among participants is that the market is stabilizing. One source said the market appeared to be "consolidating" at these levels.
The Platts Transaction Moly Oxide price fell to $15.80-16.10/lb, down from $15.80-16.20/lb a week earlier. The assessment represents dealer-to-consumer, dealer-to-dealer, producer-to-dealer and producer-to-consumer business, with Asian delivery points beyond Japan, including South Korea and India. Other delivery points are in Europe and the US.
In South Korea, business for powder was seen in a range of $15.80-15.95 LB on a CIF Busan business. No business was heard in India.
Chinese sellers were said to be not offering anything at under $20/mt, while various US and Chilean producers were also seen not offering under $16.00/lb, regardless of delivery point.
