A growing number of sellers are reluctant to offer material in the European spot market, fearing buyers could struggle with financial liquidity and breach payment terms.
Market participants noted that sellers are unwilling to bid in auctions or conclude sales for delivery beyond a 30-day window. Typically, during a period of slow demand, sellers aggressively cut their offers to encourage sales.
One UK trading company is only signing deals with 30-day payment terms this week. Another European trading firm said it also wary about the possibility of defaults, but a trader there pointed out that "if a customer has insurance and they go bankrupt at least we will get paid by the insurance company. But it makes no sense to sit on material without selling".
Some sellers and consumers are facing delays to shipments because of long queues at borders, while some buyers are having to pay extra as freight costs rise. But for the most part, buyers are still purchasing for their immediate needs.
Despite waning spot demand and trading, most metal and alloy prices have fallen only slightly overn recent weeks, with expectations of a rebound in demand after the coronavirus' spread eases in Europe.
In addition, a recovery in Chinese demand as industry bounces back has supported the European market. European prices for 57pc grade molybdenum oxide powder held above $9/lb du Rotterdam in March, according to Argus assessments, shrugging off the impact of a weaker European market.
By Anuradha Ramanathan