Chinese sellers offer Western-grade moly oxide at around $17/lb

Spot offers for western-grade molybdenum oxide rose above $17/lb on an in-warehouse Rotterdam basis this week though no done deals were reported, Chinese industry sources said Friday.

Offers were heard at $16.70-17.20/lb the previous week.

"There are inquiries but there are no offers below $17/lb now as some sellers are not selling, pending for a further rise in the price. Maybe, they might resume trade after the Chinese New Year," said a Liaoning-based trader who heard offers at $17-17.20/lb.

A Hong Kong-trader concurred.

"I have inquiries but I have limited stocks on hand. I just want to 'wait-and-see'," the Hong Kong said, admitting that he will likely to sell at $17.50/lb.

Another Hong Kong-based trader was not surprised with $17.50/lb offer.

"Sellers are very aggressive. I even heard them offering as high as $17.80/lb. However, there is nothing done at this level yet as buyers are asking at $17-17.10/lb," said the second Hong Kong trader who reckoned that the reasonable price was about $17.20-17.30/lb.

A Liaoning-based producer, who sold to end-users around $17/lb in-warehouse China this week, said: "Offers are higher as by Chinese molybdenum concentrate prices have gone up on tight supply affected by power shortage due to the cold winter."

Chinese domestic molybdenum concentrate prices had risen to around Yuan 2,150/mt unit ($326/mtu) this week up about Yuan 80-100/mtu from the previous week, Chinese sources said.

Molybdenum concentrate is the feedstock for molybdenum oxide.

"Some mines in northern China had to reduce or halt output due to limited power supply as it is needed for heating to keep people warm in this harsh winter," a Beijing-based analyst said.

When asked about market talk of Chinese industry participants importing molybdenum oxide, Chinese sources were not surprised even though their counterparts were usually sellers.

The first Liaoning trader said some Chinese traders would buy now at high prices and sell at much higher prices later on strong demand in view of the good outlook of the Asian steel industry in 2011.

Platts raised the China molybdenum oxide assessment to $17-17.20/lb FOB China this week, up from $16.70-17/lb the previous week.