With the characteristics of high strength, high temperature resistance and low density, molybdenum is added as an alloying element to special steel and stainless steel materials. Molybdenum steel is mainly used in ships, machinery, energy pipelines and other fields.

1. Molybdenum-a high-performance strategic metal

1.1 Molybdenum Major Downstream Applications

In 2020, about 80% of molybdenum will be used in the steel industry, mostly in ships, machinery, energy pipelines, automobiles and other industries.

Molybdenum content of molybdenum steel: in gear steel, pipeline steel, seamless steel pipe and other varieties accounted for relatively low, in 0.25-2.5; In stainless steel, the proportion is slightly higher, in 1.25-4%; In high-temperature alloy, high-speed steel and other varieties accounted for the highest proportion, up to 3.5-10%.

Outstanding 1.2 performance, from war metals to energy metals

molybdenum is lighter than tungsten, heat resistant than nickel:

Molybdenum, tungsten, and nickel are often added to iron as alloying elements to make alloy steel or stainless steel to improve the strength, toughness, heat resistance, and corrosion resistance of materials. They are widely used in aerospace, oil and gas extraction, automobiles, and construction.

Molybdenum and tungsten belong to the same group of elements with high melting point, good tensile strength and hardness, while the density of molybdenum is only half of that of tungsten, which is suitable for manufacturing equipment with high strength and low weight. Nickel is similar to iron, although high strength, but the melting point is much lower than that of molybdenum and tungsten.

From war metals to energy metals: during World War I, molybdenum began to replace tungsten for artillery and tank manufacturing; during World War II, molybdenum production surged, 10 times higher than during World War I, reaching 10000 tons/year; now molybdenum iron is not only used in aerospace, defense and other military fields, but also in wind power, oil and gas, thermal power and other energy industries.

2. Short-term logic: the demand for replenishment drives the price of molybdenum to rise sharply.

2.1 molybdenum prices hit a 14-year high

The upward cycle of molybdenum price has come: in October 2008, affected by the economic crisis, molybdenum price fell rapidly from the historical high of 445000 yuan/ton, and then fluctuated at 15-200000 yuan/ton. Since 2016, the global economic boom has driven steel demand, molybdenum steel application scope has expanded, and molybdenum price has strengthened.

Molybdenum prices hit a new high in 22 years: 22Q1 ferromolybdenum prices rose, due to the tight balance between domestic molybdenum supply and demand; 22Q2 Ferromolybdenum prices declined due to repeated epidemics and price pressure from steel mills. Since August 22, molybdenum supply has tightened, steel mills have warmed up in bidding demand, and molybdenum prices have soared. In October, the average monthly price of molybdenum concentrate (45%) was 3340 yuan/ton, up 42.5 and 22.5 respectively from the same month on month on month on month, the average price of ferromolybdenum was 208000 yuan/tonne, which increased by 10.6 and 33.9 percent month-on-month, respectively.

2.2 domestic production cuts, inventory de-stocking

In May 22, some molybdenum manufacturers due to maintenance or environmental protection and other impact on production, superimposed on some manufacturers to make profits, molybdenum concentrate production decreased. In August, the downstream demand for molybdenum and iron was strong, and the enthusiasm of mine production increased. In August and September, the output increased to about 20000 tons, up 24.8 and 13.7 respectively.

The operating rate center of ferromolybdenum moved up year by year, but 2022H2 was affected by the epidemic, power limit, etc., and the operating rate narrowed slightly. In September 22, the output of molybdenum and iron was 16215 tons, up 4.6 percent year-on-year and down slightly from the previous month. 22 years Q3 molybdenum manufacturers fear high risk aversion is obvious, to reduce the shutdown situation to deal with potential risks.

Due to the contraction of molybdenum supply, inventories have continued to be de-stocked since 22H2, with molybdenum concentrate and ferromolybdenum inventories falling 59% and 33% respectively in October compared with June.

Steady demand for ferromolybdenum tenders in 2.3 steel mills

The total amount of 22H2 steel is up, and the total amount of steel is 11064 tons and 11735 tons in August and September, respectively, up 24.3 and 6.1 percent month-on-month. 22Q1-Q3 totaled 84637 tons, up 13.8 percent YoY, of which Q3 alone reached 317.01 million tons, up 29.1 percent and 26.3 percent, respectively.

The increase in the total amount of ferromolybdenum in steel in the second half of 22 years was mainly due to the following three points: ① the increase in demand for molybdenum-containing stainless steel; ② September-October is the traditional peak season for steel, steel mills focus on stock replenishment; ③ steel continues to go to the warehouse, 22Q2 so far the inventory is at a low level, so Q3 steel mills purchase ferromolybdenum significantly increased.

2.4 short-term molybdenum downstream demand picks up

According to the data of key special steel enterprises, the output of crude steel and steel of special steel has rebounded slightly since July 22. In September, the output of special steel, a key enterprise, was 7.586 million tons, up 16.0/4.6 percent from the same month earlier. Among them, alloy steel 2.41 million tons, an increase of 6.1/1.4 month-on-month. From January to September, heat-resistant stainless steel increased 68 percent year-on-year, high-temperature alloy steel increased 16.7 percent year-on-year, and high-quality low-alloy steel increased 13.2 percent year-on-year.

In August and September 2022, the output of stainless steel was 514.4 and 5.474 million tons respectively; in September, the year-on-year increase of 6.4, mainly due to the completion of equipment maintenance of some manufacturers, orders improved profit repair increased production.

The output of molybdenum oxide in 22 years was improved compared with that in 21 years. Molybdenum oxide production in September 14120 tons, an increase of 16.6.