Molybdenum prices continued their decline this week, slipping to between $13.10 and $13.20 US a pound on Wednesday as buyers made lower bids in light of a decline in overall metal prices.
According to commodity research firm Platts, one Asian trader submitted a bid to a European trader at below $13.10 a pound. “You make a bid thinking you won’t get it,” he said, “but you get it easily, so this is not yet the bottom. This is making some market participants nervous.”
It has been a disappointing year so far for molybdenum, which was trading between $13.60 and $13.80 a pound in early January, rising to around $15.00 in mid-February before starting its slide to today’s level.
In addition, there are near-term concerns about oversupply. For example, despite lower prices, Chinese production of molybdenum concentrate with 45 percent molybdenum content rose 17.5 percent from the previous month and 34.9 percent from May 2011. China produces about a third of the world’s molybdenum.
Still, the long-term outlook is for a continued increase in molybdenum demand thanks to growth in emerging markets and recoveries in the US and Japan. That should help stabilize prices.