Aggressive selling by molybdenum producers looking to unload inventory has pushed prices lower, market participants told AMM.

"(A producer) accumulated inventory and needed to liquidate positions," a supplier source said, adding that the recent sales push also had been driven by a need by some producers to clear their inventories and bolster earnings before the end of the second quarter.

"We’ve seen a lot of pressure of late. The Western producers have more volume and they’ve been aggressive," a trader said.

Demand has been slow recently, leading to the build-up in producer stocks.

"There’s been a dramatic change in stainless demand from the first quarter to the second quarter. A certain negativity has crept in," the supplier source said.

Prices for molybdic oxide have fallen to between $14.50 and $15 per pound from $15 to $16 previously, while ferromolybdenum has slipped to $17.20 to $17.70 per pound from $17.50 and $18.

A second supplier source said contract customers also were taking less material. "Our contract customers have indicated that they’re going to take less for July," she said.

Some argued that the recently falling prices have caught producers sitting with inventory off guard, leading to the rapid sell-off.

"The reason why they’re doing it is that they’re a bit late on the trigger and they don’t want to sell at the bottom of the market," a second trader said.

A producer source expressed frustration at the sell-off by his competitors, saying a better strategy would be to hold off until demand returned. "I wish our competitors were more disciplined, but they’re not," he said.

There is a silver lining for the market, however, with a rebound expected when the summer lull comes to an end.

"Moly is now oversold so it will correct before the end of September," the first supplier source said, adding that he sees long-term prices around the $16-per-pound mark. "Anything less than $16 is transitory," he said.

With the absence of end-user demand, recent spot inquiries have come mainly from traders looking to stock up on material at lower prices, the second supplier source said. "In the last week or two we have had more inquiries from the trade than we usually do," she said. Aggressive selling by molybdenum producers looking to unload inventory has pushed prices lower, market participants told AMM.