India: Ferro molybdenum prices decline amid weak demand, inventory pressure

• Weak stainless steel demand drags down prices
  
  
• China's firm costs support global market sentiment
  
  

India's ferro molybdenum (Mo: 60%) prices declined by INR 100,000/t ($1,056/t) w-o-w to INR 4,000,000/t ($42,232/t) exw, as per BigMint's assessment on 1 July. The correction was largely driven by sluggish domestic demand, sufficient inventory levels with sellers, and panic selling by a few market participants looking to liquidate stocks amid limited buying interest.

Around 50 t of deals were reported to BigMint during the week in the INR 3,780,000-4,150,000/t ($39,909-43,816/t) exw price range, indicating that while deal activity remained moderate, buyers largely negotiated aggressively amid subdued demand conditions.

Global market summary

Chinese ferro molybdenum (Mo: 60%) prices increased by RMB 4,000/t ($589/t) w-o-w to RMB 326,500/t ($48,057/t) exw Inner Mongolia, supported by firm raw material costs and tighter availability.

The Chinese market remained firm as rising molybdenum concentrate prices increased smelters' production costs and tightened the availability of low-priced material. Producers maintained firm offers, while steel mills continued need-based procurement amid cautious buying. Spot trading remained limited, with tight overseas raw material supply supporting market sentiment. Prices are expected to stay stable to slightly higher, though cautious steel mill buying may limit further gains.

Across the global market, activity remained relatively subdued despite firm underlying sentiment. Asian buyers largely stayed on the sidelines amid weak spot demand, while sellers remained reluctant to lower offers because of elevated raw material costs. European ferro molybdenum prices also held firm w-o-w at $72/kg , although liquidity remained limited with few concluded transactions. Overall, market participants continued adopting a wait-and-watch approach, expecting prices to remain supported by tight concentrate availability while subdued downstream buying restricted significant upside.

Molybdenum futures on the London Metal Exchange too stayed largely steady, edging up a little by $0.03/lb w-o-w to $31.31/lb on 30 June.

Indian market trends

The Indian ferro molybdenum market witnessed a noticeable slowdown during the week, primarily due to muted demand from the stainless steel sector and the typical slowdown associated with June month-end. Stainless steel prices for 316 grade HRC declined by INR 3,000/t ($32/t) w-o-w to INR 395,000/t ($4,153/t) exw-Mumbai. Buying activity remained limited, while sellers holding sufficient inventories became increasingly willing to negotiate in order to generate cash flow, resulting in panic selling in certain sections of the market.

A key market participant told BigMint, "Actually index wise there is no drop in prices. Demand has decreased a bit, due to which people are holding inventory and some panic selling has emerged. We are focusing more on exports as there is no distress selling in overseas markets."

Indias imported molybdenum oxide costs too were supported, inching up by $0.25/lb w-o-w to $31.45/lb CNF India.

Outlook

The Indian ferro molybdenum market is expected to remain stable to slightly weak in the coming week. While firm global prices and higher raw material costs are likely to provide underlying support, domestic demand, particularly from the stainless steel sector, will remain the key driver. Unless buying activity improves, inventory-led selling pressure may continue to keep prices under check despite the positive international market trend.