Molybdenum Prices Sell Off on Steel Volatility and Chinese Zero-COVID policy

Molybdenum prices sold off in China this week. The volatility in steel prices has hit MO prices already under pressure with the Beijing warning against criticism of its dynamic zero-COVID policy weighed heavily on the already slowing economy. MO has many important uses in alloy steels, stainless steels, alloy cast irons and super alloys. It is a powerful hardenability agent and is a constituent of many heat treatable alloy steels. The top sources of molybdenum in U.S. diets are legumes, cereal grains, leafy vegetables, beef liver, and milk.

SMM data showed on May 26, the mainstream transaction prices of molybdenum concentrate (45% Mo) in China stood at 2,580 yuan/dmt, down 130 yuan/dmt, or 4.8%, from the previous week. The traded price of some bulk cargo transactions fell below 2,550 yuan/dmt.

Negative Factors on Domestic Molybdenum Prices

  • Beijing warning against criticism of its dynamic zero-COVID policy. The zero-tolerance approach, which depends on strictest lockdowns and mass testing, has weighed heavily on the already slowing economy and raised the need for further policy easing. The market participants generally hold a bearish outlook for the future market, thus suppressing the prices to some extent.
  • The volatility in the steel market continues which has seen the inventory of stainless-steel enterprises growing also with pressure from the dropping steel prices. Steel mills cut their purchasing volume and prices of ferromolybdenum, which further forced the molybdenum concentrate prices to fall.
  • The pandemic lockdown in Jiangsu, Zhejiang and Shanghai has stricken the molybdenum metal consumption. According to SMM research, orders from molybdenum metal enterprises in these places have decreased significantly, which makes the molybdenum prices drop.

SMM expects the economic recovery and the increase in the operating rates of steel mills to take time, SMM believes that the domestic molybdenum prices are unlikely to improve in a short time. With the easing of the pandemic situation and the measures taken by the country to stimulate the economy, it is optimistic that the domestic molybdenum prices will rebound in mid-July. 

Source: CPM Group

About Molybdenum

Molybdenum is a chemical element with the symbol Mo and atomic number 42 which is located in period 5 and group 6. Molybdenum does not occur naturally as a free metal on Earth; it is found only in various oxidation states in minerals. Mo is normally referred in short as ‘moly’. The free element, a silvery metal with a grey cast, has the sixth-highest melting point of any element. It readily forms hard, stable carbides in alloys, and for this reason most of the world production of the element (about 80%) is used in steel alloys, including high-strength alloys and superalloys.

Industrially, molybdenum compounds (about 14% of world production of the element) are used in high-pressure and high-temperature applications as pigments and catalysts. Mo retards softening at higher temperatures. Hence it is used in boiler and pressure vessel steels, as well as several grades of high speed and other tool steels. Mo improves the corrosion resistance of stainless steels. In HSLA (high speed low alloy) steels, it produces acicular ferrite structures.

Mo is the basis for many of the as-rolled DP (dual phase) steels used in automotive applications. While Mo may often be used interchangeably with chromium (Cr) and vanadium (V), in many cases the properties it imparts are unique. Due to it, the use of Mo has increased considerably over the past several decades.

Mo in iron and steels used for the following.

  • To improve hardenability
  • To reduce temper embrittlement
  • To resist hydrogen attack & sulphide stress cracking
  • To increase elevated temperature strength
  • To improve weldability, especially in HSLA steels.

At least 50 molybdenum enzymes are now known in bacteria, plants, and animals, although only bacterial and cyanobacterial enzymes are involved in nitrogen fixation. Molybdenum is an essential trace element that is naturally present in many foods and is also available as a dietary supplement.

Sources of Molybdenum

In 2008, the reserves were based on 19 million tons of molybdenum, according to the U.S. Geological Survey. China had the largest reserves, followed by the U.S. and Chile. Many molybdenum mines are among the most productive in the world, the largest of which can transport more than 50,000 tons of ore a day.

Molybdenum exists in many minerals, but only molybdenite (MoS2) is suitable for the industrial production of molybdenum products. Molybdenite may be the only mineralized mineral in a single ore body, but it usually co-exists with other metals, especially copper sulfide minerals. The molybdenum content of each ore body is between 0.01 and 0.25%.

In food legumes are the richest sources of molybdenum. Other foods high in molybdenum include whole grains, nuts, and beef liver. The top sources of molybdenum in U.S. diets are legumes, cereal grains, leafy vegetables, beef liver, and milk. Milk and cheese products are the main sources of molybdenum for teens and children.

The amount of molybdenum in food depends on the amount of molybdenum in the soil and in the water used for irrigation. Drinking water generally contains only small amounts of molybdenum. However, according to 2017 data from the U.S. Environmental Protection Agency, 0.8% of drinking water samples had molybdenum levels above 40 mcg/L.

The U.S. Department of Agriculture’s (USDA’s) FoodData Central does not list the molybdenum content of foods or provide lists of foods containing molybdenum. Therefore, the amount of information on molybdenum levels in foods is quite limited.

Sources: NIH SMM

From The TradersCommunity Research Desk