LME molybdenum price rebounded on March 28 and still maintains an upward trend. As a result of shipping from LME designated warehouses continuing due to the anticipation of a price rise in the market, the inventory level on May 14 (at the time of trading opening) was reduced to 60 tonnes and thereafter remained at a low level without an atmosphere of increase.

LME molybdenum price on December 31st 2013 was USD 21,500 per tonne (both cash seller and 3 month seller), and the inventory level was only 330 tonnes, for which the price on 19 May 2014 was raised by USD 1,000 to USD 30,500 (both cash seller and 3-month seller), and the inventory was 60 tonnes as aforementioned which represented a decrease of 270 tonnes.

This year, the production of special steels including stainless steel is in good from in Europe and USA and the actual consumption of molybdenum also is in good form. On the other hand, as to the production result in the period from January to March in 2014 by producer, many of producers curtailed production from the year earlier period, and the worldwide supply volume was reduced from the last year. Therefore, the tight feeling has come up in the market, which makes a push to price hike and decrease in the market inventory.

As for how high the molybdenum price will go up, many of market watchers see one upper limit will be somewhere around USD 31,000 per ton which is a production cost for molybdenum in China. It is understood that, if the price exceeds this level, the resumption of operation will be prevailing in China which leads to the increased export, and the world demand and supply balance will again return to excess supply. Besides, some of market watchers forecast the price will go up to somewhere around USD 32,000 to USD 33,000 until China's export increases.

• [Editor:Mango]