Removing export taxes on its exports of moly metal China has boosted its exports of moly metal and scrap and left moly oxide and ferromoly markets largely unaffected.
The lifting of the 5% export tax on 99.9% moly metal had an immediate impact, with supply in China tightening as demand for exports surged, mainly from Europe. June cargoes supplied by around 20 Chinese producers had sold out by end May and July cargoes were already fully booked this week, with the earliest supply currently seen available for August, a South Korean trader said. The volume of China’s moly metal sales to Europe rose 20-30% after the tax was lifted, the trader added.
Moly metal prices typically move in tandem with main feedstock Chinese domestic moly concentrate prices, but the two have diverged in recent weeks. Moly concentrate prices fell 5-10% over April-June to currently stand at Yuan 1,000/metric ton unit, equating to $163 for 10 kg of moly contained in one metric ton of concentrate. On Monday moly metal was being offered at $25-$26/kg CIF Rotterdam for August loading, compared with $24.60/kg CIF Rotterdam for July loading last Thursday.
In contrast, moly metal demand has not risen in Japan, where it is less widely used than in Europe. But the removal of China’s export tax has fueled interest in Japan for scrap moly, which is used in superalloys, sources said.
“There is definitely a drive among the Chinese suppliers to export more 99.9% moly wire and factory-origin clean moly metal thanks to the 15% export tax removal. In the last month or so, we have received offers for 20-40 mt container loads,” a Japanese trader said.
Japanese end-users in the chemical industry have also been looking into substituting scrap moly with moly metal, said a second Japanese trader, adding no deal had been reached due to a gap between buyer and seller price ideas. The second trader said he was seeking to buy at a 10% discount to international moly or ferromoly prices, which sellers would not accept.
A third Japanese trader said a 5-10 mt lot of 99.8% scrap was offered at $24/kg CIF Japan two weeks ago. “Domestic supplies were $1.50/kg lower. Imports cannot win against local supplies,” a third trader said.
