Quoted At US$17.01 Per Lb. Of Mo For Selling, How Extent Does LME Moly Price For Cash Stabilize Is Question
The transactions to trade actual cargoes of molybdenum oxide for cash payment at LME commenced from the 19th May of 2010. The transactions to trade molybdenum oxide at LME for deliveries for 3-month and 15-month futures already started from the 22nd February of 2010. Therefore, as the trading on actual cargoes for cash payment has been added, the transactions to trade molybdenum oxide at LME have resulted in a balance.
LME prices of molybdenum oxide at the 19th of May were <> US$35,500 per ton of Mo (US$16.19 per lb. of Mo) for cash as an indication for buying and US$37,500 per ton of Mo (US$17.01 per lb. of Mo) for cash as an indication for selling and <> US$36,000 per ton of Mo for 3-month futures as an indication for buying and US$38,000 per ton of Mo for 3-month futures as an indication for selling. On the 19th of May, the actual quantity of molybdenum oxide traded at LME was 56 tons on Mo content base.
It has already passed 3 months since price of molybdenum oxide has been listed on LME but the matter to trade molybdenum oxide at LME has unexpectedly faced a lack of the surge. In the course of the 3 months, the volumes of cobalt metal traded at LME were 1,560 lots with 1,560 tons and amount of US$65.3 million. On the other hand, the volumes of molybdenum oxide traded at LME during the 3 months were 119 lots with 714 tons on Mo content base and amount of US$27.6 million.
Many of annual contracts concluded between leading steel companies and major molybdenum mines on supply of molybdenum for shipments in the calender year of 2010 have adopted the formula to fix its price on the basis of the price for molybdenum oxide published periodically in Metals Week in the same case as that applied in the preceding year of 2009. Accordingly, price of molybdenum oxide quoted at LME has become just a reference for the market prices of molybdenum.
Also, the producers registered on LME are mainly converters and the number of molybdenum mines registered on LME is so restrictive, having totaled to 6 brands. Major molybdenum mines have still taken an attitude to watch carefully about further movements in relation to registration of their own molybdenum brand.
Among major molybdenum mines, Antofagasta Mine of Chile already announced their policy to adopt the formula to fix price of molybdenum on the basis of the price for molybdenum oxide quoted at LME and said that this formula will be introduced into the contracts to be concluded with their regular consumers of molybdenum for shipments in 2011. However, which type of contract will be adopted by major molybdenum mines, such as Codelco of Chile, for shipments in 2011 is subject to an issue of the trading on molybdenum oxide at LME to be developed in the near future.
Prior to listing molybdenum on LME, the molybdenum industry of the world has given a logical interpretation for the trading on molybdenum oxide at LME in 2010. However, it is no doubt that the trading on molybdenum oxide at LME is surely inferior to the successful transactions on cobalt as listed on LME at the same time. It has been pointed out that the needs from molybdenum market to trade molybdenum oxide at LME have a scarcity of the upsurge.
|
