Ferromolybdenum market to see price fluctuations in Q1 2021
Disrupted supply, increased prices of raw materials and weaker USD dollar have sent the pricing of Ferromolybdenum up in the last months of the year. A tendency that tends to reverse in 2021.
After the first waves of the worldwide pandemic, the demand for Ferromolybdenum (FeMo) has slowly been finding its footing again.
However, to keep up with the demand has become a difficult task for the sellers, as outside developments have interfered with the supply.
Disrupted supply of Ferromolybdenum
Several factors have played a role in the low output of Ferromolybdenum. The war breaking out between Armenia and Azerbaijan has shortly disrupted the supply of the materials from Armenia. At the time, the market wasn’t heavily impacted by the lack of materials coming from the country. Moreover, the peace agreement that the two parties entered mid-November, stands to put Armenia back in supply and help cease the speculations around the supply of Ferromolybdenum.
Besides, the lack of Molybdenum oxide has become an issue for the industry. That lack was mostly caused by the long idling of the key mine in China. The producer returned to the market only in Q4 being out of production for a couple of months. This supplier raised the prices for its FeMo, which led to a further upturn in the prices across the industry.
Apart from the sustainable price increase, the weekly updated Metalshub price indices, showed that the increased FeMo prices worldwide was supported by a weaker USD dollar against the euro after uncertainty caused in the US financial markets after the end of the election campaign and upcoming transition of the power to the new administration.
Metalshub average weighted weekly price for FeMo, USD per kg Mo, FCA Europe
Ferromolybdenum prices pause the market
Many sellers were caught by surprise when the demand for Ferromolybdenum began going up. That meant that many sat on low stocks and, therefore, now must buy FeMo despite the price upturn.
Nonetheless, many steelmakers found the prices too high, making them hesitant with their purchases. That, despite the fact, that many sellers are already suffering losses when selling the alloy. By the beginning of December, however, many steelmakers eventually came to the market to replenish the stocks, which has driven the prices for FeMo up again.
Now, it seems that the market has become more balanced compared to September and November, which together with the seasonal break will most probably drive the FeMo prices down in Q1.
Be on top of pricing with Metalshub
In the past months, the pricing of Ferromolybdenum has been heavily affected by short-lived factors. That makes it difficult to speculate and foresee market developments, not to mention knowing when a price is good for a product.
Are you currently carrying your long-term contracts? Then it’s vital to have a price index that is as accurate as possible to lean on. The Metalshub Price Discovery Service gives you access to weekly updated price indices based on real data from market transactions on different ferroalloys.
Schedule a demo with our team now and learn more about how our price indices can help you and your business get the best possible prices.