India: Ferro molybdenum prices drop on reduced bulk orders and falling LME futures

Indian ferro molybdenum prices experienced a decline of INR 175,000/t w-o-w due to the reluctance of market participants to deal in bulk. The producers waited to see if the market would move back in a positive direction. On the other hand, buyers were anticipating further price reductions. Prices dropped for seven straight weeks, reaching a four-month low.

According to SteelMint's assessment on 18 October, Indian ferro molybdenum prices stood at INR 2,525,000/t exw-Nagpur on 60% pro rata basis. Around 10-12 t of trades were concluded worth INR 2,500,000-2,550,000/t.

Factors leading to price reduction

Market players adopting a cautious stance: Due to the current downward trend in the market, majority of the players were not in a rush to trade as there was no clarity of the direction in which the prices would go. However, there was selling pressure for some producers due to which they sold material to keep operations running and to maintain liquidity in the market. Recently, a major producer of stainless steel held an auction that resulted in decreased prices for ferro molybdenum. In such a scenario, only few deals were concluded at the ongoing lower market rates.

Global influence: Ferro molybdenum prices in China fell by RMB 50,000/t ($6,837/t) w-o-w to stand at RMB 194,500/t ($26,595/t) ex-Inner Mongolia, including taxes. Extreme weather conditions had an impact on China's raw material supply. The worldwide market remained volatile because overall demand remained irregular.

Fall in LME molybdenum futures: The prices on the London Metal Exchange (LME) platform was $20.08/pound on 17 October, a decrease of $1.99/pound w-o-w. Since market prices are determined globally through this platform, this continued to be a major contributing element to the decline in pricing.

Outlook

Future price direction will be determined by both domestic demand and LME prices. Furthermore, sources indicate that the effects of import duties on material imported from South Korea may be felt within the next 15 to 20 days.