The cash price of molybdenum slipped to $24,000 to $25,000 a tonne on the London Metal Exchange over the past week, from $25,500 $26,500. That is mainly because of disappointment over last Friday’s announcement that the Federal Reserve will not immediately introduce more stimulus measures. However, the negative mood was tempered somewhat by the fact that the Fed seems to have left the door open for further quantitative easing.
“Overall, we would not be surprised if … metals rise further in anticipation of more QE … but we feel there is a high risk that it will end up being a ‘buy the rumor, sell the fact’ situation in that any positive reaction to stimulus may end up being relatively short-lived,” wrote FastMarkets analyst William Adams in a research note quoted by Metal-Pages.
Europe also saw moly prices slip slightly, to $31.75 to $32.25 a kilogram from $32 to $32.50. That had some traders questioning whether the metal’s 20 percent rise in the past three weeks — which largely resulted from short covering and tight inventories at Rotterdam — can be sustained, though there was still some optimism. “There may be some cheap sellers out there, but I think above $32/kg is still achievable,” said one trader.