In an interview with Roskill Information Service on the third day of 'Molybdenum week', Mr Khayyam Jahangir manager of Steel Alloys Research said that "China is in the focus again, today we take a closer look at the market developments behind molybdenum price decline in 2008-09. Even low production cost, one of the top assets of the Chinese economy, has failed in case of molybdenum. In the Ukrainian market, Armenian ferromolybdenum is still traded with a price advantage over its Chinese counterpart; we'll get back to this at the end of the week."
He said that "When the molybdenum market collapsed in 2008-09, prices for molybdenum oxide fell below USD 9 per pound (around USD 20,000 per tonne). This in turn meant that many Chinese producers, particularly in the Huludao region, were facing production costs above the market price. As a result, Chinese imports for molybdenum soared during that period."
The US Geological Service identifies Huludao as the producer of at least 30% of the whole molybdenum concentrate output in China. By another estimate, Huludao Lianshan is one of the top three molybdenum concentrates producing enterprises nationwide. The situation was completely different from that in 2002, when low ferromolybdenum prices were considered anti competitive by the EU and caused an antidumping duty.
Mr K Jahangir said that getting back to the current situation, commenting on the current positive trade balance of molybdenum in China in 2011 that was probably a reflection of large stocks in the Chinese market.
With regards to the fall in price, this has been due to the weakness in the global economy, and a lack of significant molybdenum volumes being purchased, as nobody has been or is willing to place large orders.
He said that "I would expect prices to remain flat in 2012, with maybe some movement taking place from the second half of the year onward. However, the Euro debt issue is currently dragging on most commodity markets, and if the situation is resolved soon we could see an improvement in sentiment."
(Sourced from www.news.am)
