Ferromolybdenum demand to keep stable in Q4

Asian Metal: Mr. Tang, thank you for accepting our interview. As a mainstream ferromolybdenum producer in Liaoning Province, please first introduce your company's history. Besides, what is the current production status of your company?

Mr. Tang: Founded in November 2011, our company is located in Yixian County, Jinzhou City, Liaoning Province. It covers an area of 150 mu, among which the production plants cover an area of 30,000 square meters, and the number of employees is about 150. Its average monthly output for ferromolybdenum is 1,500t and the designed annual output is 30,000t. Its ferromolybdenum output was about 15,000t in 2017, and that was nearly unchanged in 2018 and 2019 respectively. At present, the company is in normal production, with stable orders from downstream consumers.

Asian Metal: What is your company's position in the industry?

Mr. Tang: At present, our ferromolybdenum production capacity ranks top five in China, and most of the domestic steel enterprises are our customers. We always adhere to the principle of giving top priority to ensuring the quality of our ferromolybdenum, and at the same time, optimizing the internal management to reduce the cost.

Asian Metal: In view of the current market, how do you see the domestic molybdenum market trend in Q4?

Mr. Tang: In H1 2020, prices for molybdenum products kept falling, as the demand remained weak affected by the COVID-19 pandemic; in Q3, the pandemic in China was under control, and thus prices in the molybdenum market began to stabilize albeit with fluctuations. In Q4, with large domestic mine owners returning to the market, the monthly supply of molybdenum concentrate exceeded 2,000t, which means a relatively abundant supply of the raw material. However, the demand from steel enterprises tends to stabilize. Because of the spread of the pandemic abroad in the past six months, the foreign market still sees no improvement in demand at present, leading to a massive influx of foreign molybdenum raw materials into China, and thus the overall supply in the Chinese market remains sufficient. In Q4, prices in the molybdenum market lack momentum to rise, but they keep stable on the whole because the current raw material prices are close to the comprehensive cost of mines.

Asian Metal: This year, affected by the pandemic, a large number of foreign molybdenum raw materials flowed into China. Do you think how it will affect the Chinese market?

Mr. Tang: This year, due to the soft demand caused by the pandemic in the international market, a large number of foreign molybdenum raw materials poured into China. Although the domestic market sees stable demand due to the effective control of the pandemic, domestic prices for molybdenum raw materials kept falling due to the sufficient supply, with those for molybdenum concentrate once dropping below RMB1,300/mtu (USD8.4/lb) EXW D/P. The total monthly imports of molybdenum oxide and molybdenum concentrate were around 2,000t last year, while those exceeded 8,000t in the past six months, leading to a decline in domestic prices of molybdenum products.

Asian Metal: After the end of the pandemic, what do you think the trend of the market?

Mr. Tang: Due to the spread of the pandemic, the demand in the international market has not improved so far this year; that in the Chinese market does not change much compared with last year due to the effective control of the pandemic, but the overall supply of raw materials has become abundant. If the vaccine is available early next year and the pandemic is effectively controlled, the domestic and foreign demand will be gradually released, which will result in an outflow of the imported molybdenum raw materials from the Chinese market into the international market. At that time, with the economy recovering and raw material supply tightening, molybdenum products prices are expected to rise substantially.

Asian Metal: We learn that your company is currently investing in the construction of molybdenum chemical production line. May I know when it will be put into commercial operation? What about the production capacity and output?

Mr. Tang: We originally planned to put the molybdenum chemical production line into commercial operation in May 2021, but due to the pandemic, we expected to postpone the trial production to August 2021. Our designed production capacity of ammonium tetramolybdate production line is 12,000tpy, and that for ammonium dimolybdate is 2,000tpy. We also plan to construct ammonium heptamolybdate, high-purity molybdenum oxide and molybdenum powder production lines.

Asian Metal: What are your expectations for the molybdenum chemical market next year?

Mr. Tang: Under the impact of the pandemic this year, the demand for molybdenum chemical products was suppressed. We believe that if the pandemic ends next year, the domestic petrochemical industry will see a great increase in the demand for ammonium molybdate and high-purity molybdenum oxide, and prices for molybdenum chemical products will rise significantly in 2021.

Asian Metal: Thank you very much. Wish your company a prosperous future.

Mr. Tang: Wish Asian Metal a brighter future. I hope we can achieve win-win cooperation.