Molybdenum Oxide Daily Dealer futures contract launches on CME

Trading exchange operator CME Group has launched a molybdenum oxide contract settled against the Molybdenum Oxide Daily Dealer (Global) futures contract provided by Platts, part of S&P Global Commodity Insights, with the first trade reported March 13.

A contract for a 17 mt consignment of molybdenum oxide for the October 2023 to February 2024 strip changed hands at $34.25/mt, according to market sources.

The Molybdenum Oxide Daily Dealer (Global) futures contract reflects bids, offers and transactions between traders, steel mills and other users in the open, physical spot markets of roasted molybdenum concentrates containing a minimum of 57% molybdenum and a maximum of 0.5% copper, 0.05% lead.

Molybdenum, typically a byproduct of copper mining, is also seeing the impact of unexpected disruptions in the copper mining sector in South America, on top of an expected structural deficit in 2023.

The global market for molybdenum, a byproduct of copper mining, has been seeing a structural deficit arising from social unrest in Peru which has disrupted output across the domestic copper mining industry.

Within that context, short covering from traders has generated volatility in across global and regional molybdenum oxide markets, with prices almost doubling from $20.2/lb Mo to $38.5/lb Mo between November 30 and February 2.

Given tight supply, many market stakeholders see current price levels of $31.90-$33.90/lb Mo as the bottom of the market, with prices expected to increase as traders begin to cover and compete for deliveries later in March.

Locking in strip price lots at slightly higher prices appears an attractive prospect given the bullish market sentiment, offering hedging opportunities that could help mitigate the ongoing price volatility expected to persist for the remainder of 2023.

Platt assessed the Daily Dealer Molybdenum Oxide (Global) assessment at $32.90/lb on March 10, based on a range of $31.90/lb-$33.90/lb Mo, up 57% from an assessed price of $20.90/lb on Dec. 1.