Chinese spot ferromolybdenum prices have peaked off from end October levels as fear of environmental inspections resulting in plant closures receded, market sources said Wednesday.
The central government inspections started in late October and some moly oxide roasters and ferromoly plants either closed or cut production. A Chinese trader said some may need to stay closed.
Steelmakers purchase price levels, that rose to Yuan 138,000-139,000/mt ($33.30-$33.55/kg) ex-plant, 16% value added tax inclusive, in the last week of October, have fallen to Yuan 132,000-135,000/mt in the last two weeks, several Chinese traders said.
Chinese steelmakers were believed to have bought 8,000 mt from the spot market via public tenders in September, 8,000-9,000 mt in October, but so far this month, 5,000 mt, the Chinese trader said.
Chinese steelmaker buying usually kicks in at the end of the month. But so far this week, there were minor inquiries for 40-60 mt, sources said. One steelmaker in the Jiangsu province, which typically buys over 100 mt, was asking for quotations this week.
But the mill procurement unit reportedly told prospective sellers he would wait until prices were lower.
Mills were not buying raw materials, also because of uncertainties in steel demand while Chinese economic indicators deteriorate. Buyers want a clearer picture for 2019 before buying, sources said.
"Everything dropping...oil prices, steel prices. Moly itself cannot afford to stay strong for long," a second Chinese trader said.
The first Chinese trader said China may have 3,000 mt of excess ferromoly in the country.
The central government inspectors are expected to complete inspections of industrial plants in the Liaoning province on the week of December 4, a ferromoly plant source said.
S&P Global Platts could not confirm inspection schedules with the Chinese government.
