China’s SRB Buys Moly Oxide, Cobalt

Reuters reported that China’s State Reserve Bureau (SRB) has purchased nearly 3,000 tonnes of molybdenum oxide in a bid to “support struggling domestic producers squeezed by tight credit conditions.”

It has also bought between 100 and 200 tonnes of cobalt. It had hoped to buy 1,000 tonnes of that metal.

As quoted in the market news:

The SRB is expected to buy another 2,300 tonnes of molybdenum before the end of 2014, and is also likely to still be looking to buy the 1,000 tonnes of cobalt initially sought, a move traders said could squeeze cobalt prices higher.

High grade cobalt prices are at $14.95-$16/lb, their highest since May 2012 as the market had tightened in recent weeks due to high demand and low producer supplies.

‘They were unable to find the quantity they needed. They will have to come back into the market another time to buy up to 1,000 tonnes,’ a cobalt trader said.

Traders said the molybdenum oxide purchase was unlikely to significantly lift international prices, with plentiful supplies and low demand. Molybdenum oxide prices are trading steady at $13.30-13.50/lb.

 Click here to read the full Reuters report.