Production of crude special steel in which molybdenum is mainly consumed during January to September 2011 was 17.99 million tonnes, down by 0.8% YoY from 18.13 million tonnes in the same period of 2010, but imports of molybdenum oxide and ferromolybdenum increased year on year.
Imports of the two items during the nine months this year were, molybdenum oxide: 27,890 tonnes, up by 16.8% YoY from 23,869 tonnes in the same period of last year, ferromolybdenum: 1,839 tonnes, up by 9.9% YoY from 1,673 tonnes. Japan's domestic production of ferromolybdenum by converters in the same period was 3,876 tonnes, up by 16.1% YoY from 3,388 tonnes.
Consumption of ferromolybdenum is in the official statistics by the Ministry of Economy, Trades and Industry, but consumption of molybdenum oxide, much bigger in consumed quantity, has been left unknown as it was removed from the statistics in 2004. Only clue for the consumption trend of the oxide is given by watching the imports. It is of course necessary to consider to a certain extent the rebound from the low imports in 2010, but even with the consideration, the increasing trend of imports in 2011 is obvious.
As to the combined inventory of ferromolybdenum and molybdenum oxides at the ferromolybdenum producers and at the steel mills, the recent trend shows a gradual increase. At the end September, there was 1,707 tonnes in total in the inventory, which was almost in the same level as it had been in 2008-09 when Japan's special steel production was at its peak, historically the highest level. Given the forecasted production of special steel, possibly curtailed, the inventory level may be a little too high.
Move of the quarterly averaged prices of oxides in the international markets was, January to March 2011: USD 17 per pound Mo, April to June: USD 16 per pound Mo, July to September: USD 14 per pound Mo and October to November: USD 13 per pound Mo, downward all the way. The prices are forecasted to decline even further, therefore the high inventory could become a problem of re evaluation losses for the holders in the near future.
(Sourced from TEX Report Limited)
