Japan's moly oxide end-users expect 10-15% decline in 2013 demand
Tokyo (Platts)--11Dec2012/524 am EST/1024 GMT
Japan's demand for molybdenum oxide powder is expected to drop 10-15%
year on year, end-users of the product said Tuesday, citing weak economies in
the US and China and a possible slowdown in the automotive industry.
Japanese moly oxide demand is affected by global automotive, energy
pipeline and stainless steel demand, as moly-containing steel is exported for
The country's moly oxide imports totaled 29,106 mt over January-October,
according to customs data.
There was optimism among some end-users that these major economies may
recover by July next year, but they were being cautious and kept their
full-year forecast low.
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One major automaker said the company's preliminary demand outlook for
2013 was stable, but moly industry sources, who supply steel to automakers,
said they are not as confident as their customers on a stable outlook.
"That is probably because the steelmakers were hit by the slump in
automotive related orders since October, following the slowdown in domestic
car sales," a steelmaker said. "Domestic car sales are expected to stay weak
in 2013 so steelmakers think the current gloom will continue," he added.
The automaker sources do expect domestic car sales to suffer double
digit cuts next year, however, they said higher overseas sales will help even
Japanese car sales started to fall after the government subsidy program
to support car sales ended in September.
Moly industry sources said the automakers' scenario for better overseas
sales is not convincing, as consumer spending does not look promising
anywhere on the back of a bleak economic outlook globally.
Industry sources estimate that the Japanese automotive industry consumes
600-800 mt/month of molybdenum oxide and ferromoly, mainly for chrome-moly
steel with 0.08-0.3% molybdenum.
Moly demand for steel pipes was also expected to edge down in 2013 from
300-500 mt/month, sources said. Moly demand for stainless, seen to be at
around 300 mt/month, is also forecast to stay slow depending on the global
Three consumers, who buy over 200 mt/month, said they were seeing a
10-15% cut in their 2013 consumption volumes.
As a result, the volume of moly oxide purchased next year via long term
contracts will decrease accordingly, the consumers said.
Japanese steelmakers, ferromoly plants and trading houses are currently
in negotiations for January-December 2013 contract volumes with North and
South American producers and other overseas suppliers.
"Around 90% of Japan's annual requirement was on supply contracts, now
this ratio has fallen to 70-80%," said one producer, wrapping up the 2013
negotiations. He added that talks with 70% of Japanese buyers were complete.
"My 2013 demand outlook is flat from 2012, as customers secure their
minimum requirement on contract and secure the rest from the spot market," he
--Mayumi Watanabe, email@example.com
--Edited by Geetha Narayanasamy, firstname.lastname@example.org