Prices of molybdenum concentrate in China has surged 18 percent since December, 2015 due to production suspension of some mines and traders' reluctance to sell goods, the Shanghai Securities News reported on Tuesday. At present, the molybdenum concentrate price is still lower than production costs of the mines before the suspension.In the short term, the ore producers will hardly resume production, which will lend a support to the price, said industry watchers.
In November, 2015, the molybdenum concentrate price fell slightly and price of ferro-molybdenum purchased by steel mills declined to about 50,500 yuan/metric ton (tonne). At the end of November, majority of the mines were reluctant to sell goods at a low price, leading a tight supply in the market and some downstream ferro-molybdenum plants also subsequently raised the offer.
At the beginning of December, due to tight material supplies and the mine's price hike, price of the molybdenum concentrate rebounded sharply. Moreover, with the facility overhauls increasing, the tight supply continued amid active inquires on the downstream market. In early January, price of the molybdenum concentrate with more than 5-percent grade increased 10 yuan/tonne to be in a range between 730 yuan/tonne and 750 yuan/tonne. Given the production suspension and tight supplies, the rebound in molybdenum concentrate price will likely continue, said some institutions. On China's A-share market, Jinduicheng Molybdenum (601958.SH) and China Molybdenum Co. (603993.SH; 03993.HK) are engaged in development of the molybdenum resources.
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