Highlights

  • Busan moly oxide rose US$0.75 in a week to US$33.63/lb Mo on 6 Nov, with deals at US$34.40 in Europe; China's benchmark added 0.8% on 10 Nov.
  • Buyers who waited out the late-October dip came back, Asian contract talks began and major mines are expected to produce less in 2027.
  • Whether US$34 holds depends on real steel demand; watch Chinese ferromoly tenders, Asian contract settlements and Thompson Creek's restart.

After a sharp October sell-off, molybdenum buyers rushed back in and the US$34/lb mark has turned from a ceiling into a trading range.

What happened

Molybdenum oxide, the main traded form of the steel-hardening metal, extended its rebound into November. 57% oxide in Busan warehouses was assessed at US$33.50-33.75/lb Mo on 6 November, an average of US$33.63, up US$0.75 on the week.

Rotterdam rose by a similar Margin to US$33.55-33.90/lb, and trades were heard after the assessments at US$34.40 in Europe and US$34.10 in Busan. Only a week earlier, Busan deals had briefly fallen to US$32.30.

China followed. The molybdenum benchmark in China rose 0.8% to CNY 607.50/kg on 10 November. That is 2.1% lower than a month ago but almost 28% higher than a year ago. The LME's oxide contract tracks the same market. The two physical hubs have converged: on 3-4 November Rotterdam and Busan were just US$0.05/lb apart, while European ferromoly was quoted at US$78.30/kg Mo.

Why it happened

The trigger was restocking. When prices broke lower in late October, buyers held off, expecting further falls. Once trades hit US$32.30, deferred orders and month-end buying poured in, and sellers with scarce spot material stopped offering cheaply.

Then the longer view took over. Asian buyers opened annual and medium-term contract talks just as several major mines are expected to produce less in 2027, raising fears of shortfalls. In Europe, spot ferromolybdenum is tight and high freight from Asia slows replenishment. In China, dearer imports have raised replacement costs and limited mine sales have tightened spot supply.

Steel mills are paying up. Chinese ferromoly tender awards moved above CNY 330,000/t, while 45% concentrate rose 2.5% on the week to CNY 5,295/mtu. Market Participants note that "the $34 level has therefore shifted from a psychological threshold to an actual trading range".

The Supply backdrop helps. Freeport, the biggest Western producer, kept third-quarter output flat at 22 million lb while its realised price jumped to US$32.46/lb. BMO Capital Markets expects a sixth straight annual Deficit in 2027.

How it plays out

Caution is warranted, as current evidence is "not sufficient to conclude" that feedstock is in an actual shortage. The October rebound came from restocking and Liquidity rather than higher end-use demand, so it could fade once inventories are rebuilt.

The early signs this week are mixed. A Fujian mill tendered for ferromoly at CNY 324,000/t on 11 November, below last week's awards, while northern Chinese mines sold concentrate at CNY 5,400-5,440/mtu. These grades differ from the 45% benchmark, so they are not a direct comparison.

Mines win if contract talks lock in higher prices. Roasters and ferromoly smelters, whose margins have not fully recovered, are squeezed between costly feed and reluctant steelmakers. Stainless and alloy steel producers carry the bill.

Next week, watch whether Busan and Rotterdam trades hold above US$34/lb, the next round of Chinese steel-mill tenders, and news on Centerra's Thompson Creek restart in Idaho, which is entering its final countdown. Extra US primary supply would test the 2027 deficit story. Freeport's Bagdad expansion could add 10-12 million lb a year, but its Investment decision is only due this quarter and construction would take three to four years.