European SMO254 Prices Hovering High Amidst Soaring Raw Material Costs

Germany: In the European market, the SMO254 prices witnessed an unprecedented surge in the week ending February 10, owing to the flattened supply chains and recent volatility in raw material molybdenum markets. According to market participants, the recent uptick in global molybdenum markets has critical and fundamental factors driving prices beyond SMO254 market participants' expectations. Suppliers claimed that by the last week of January 2023, raw material molybdenum prices had touched their highest mark in 17 years, but SMO254 market participants are skeptical about the factors driving volatility. Inquiries for SMO254 have remained strong, owing to the buoyant downstream trading activity. However, not everyone is optimistic about demand. According to some European SMO254 producers, utilization is still 30% down from pre-COVID-19 levels. Manufacturers'  long-term SMO254 contracts were hampered by weak demand near the end of 2022, forcing buyers to the spot market in December and the first quarter of 2023.

Buyers were pessimistic during Q4 2022 due to the energy crisis and the risk of a recession. Many SMO254 customers did not sign annual contracts but made one-time purchases. Distributors are now requesting more material, but it is not available. Furthermore, the raw material molybdenum market is experiencing production difficulties. Customers could not access previously purchased units because a warehouse company restricted the release of this material. Customers with deadline-based demand are herded to the spot market.

According to our sources, problems with European production have strained SMO254 supply chains even more. Reduced availability of SMO254 in Rotterdam increased traders' achievable prices, especially given the market's recent short covering. Trading companies in Europe assert that, as they lack material, their prices are above the range. They do not have anything scheduled until mid-February. Their first sales for January deliveries occurred in December. As the price of SMO254 is rising and consumers are buying in, there is plenty of opportunity to sell in the first half of February. In recent weeks, the trader alluded to logistical issues in Rotterdam.

As a result of the recent market volatility, ChemAnalyst anticipates that SMO254 prices will remain inflated in the coming weeks. Traders with long contracts are also unwilling to let go of units cheaply for fear of missing out on further gains. This would result in very few offers on the market, with buyers forced to pay exorbitant costs to secure the required material. As a ripple effect, SMO254 prices will remain high.