Singapore (Platts)--21Jan2011/700 am EST/1200 GMT
Spot offers of western-grade molybdenum oxide firmed up as most sellers continued to hold back their offers in view of the upcoming Lunar New Year holidays, Chinese industry sources said this week. Offers were heard at $17.20-17.50/lb in-warehouse Rotterdam, compared with $17-17.50/lb the previous week. "Offers seem to be capped at $17.50/lb at the moment and the market is rather quiet. I guess it's the Lunar New Year mood. Nobody seems to be keen to trade. Anyway, sellers are not in a rush to sell in view of the good outlook of the steel industry in 2011," said a Liaoning-based source who heard offers mostly at $17.30-17.40/lb. A Henan-based producer concurred with this statement. "We are not offering for now as we are making preparations for the Lunar New Year holidays," said the Henan producer who last heard offers at $17.20/lb. China is officially closed from February 2 to 8 for the Lunar New Year holidays but some workers will stop working the week prior to that in order to make their way back to their hometowns for celebrations. "Previously, prices jumped too sharply and now they appear to be stabilizing around $17.30/lb this week," said a Shaanxi-based producer, who has sold 20 mt to a trader at $17.50/lb CIF India. He, however, still aims to sell at $17.50/lb. A Liaoning-based producer has sold to end-users at $17.20-17.30/lb in-warehouse China this week, up from slightly above $17/mt in-warehouse China the previous week. "I don't think you can get anything around $17/lb," the Liaoning producer said. Another Liaoning source agreed with the Liaoning producer. "I sold to a trader at $17.20-17.30/lb in-warehouse Rotterdam this week. I heard offers at $17.50/lb but did not hear anything done at this level," this Liaoning source said. Meanwhile, Chinese industry sources generally agreed that domestic supply of molybdenum concentrate remained tight in North China amid a power shortage due to the cold winter. Molybdenum concentrate is a feedstock for molybdenum oxide. Offers of Chinese domestic molybdenum concentrate prices held steady at Yuan 2,150/mt unit ($327/mtu), compared with Yuan 2,100-2,150/mtu the previous week. "Done deals are at Yuan 2,130-2,150/mtu this week, compared with Yuan 2,130/mtu," a Beijing-based analyst said. Platts increased the China molybdenum oxide assessment to $17.20-17.30/lb FOB China this week, up from $17-17.20/lb the previous week.--Alvin Yee, alvin_yee@platts.comSimilar stories appear in Metals Week. See more information at http://bit.ly/MetalsWeek