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[Ferro-Alloys.com]Nine leading molybdenum producers in China have proposed cutting national production of molybdenum concentrates by 10% in 2016 as the industry faces continuing challenges of severe overcapacity, cut-throat competition, slumping prices in both international and domestic markets.
According to a joint proposal released Thursday by the producers through Chinese state-owned metals consultancy Beijing Antaike, the Chinese non-ferrous metals sector has undergone the most difficult times since the second half of 2015, while molybdenum prices in the international and Chinese markets have plummeted to new lows since 2013.
"Molybdenum prices, which are below average production costs of the industry, have deviated strongly from market fundamentals," the producers said in the proposal, warning that the survival and development of the Chinese molybdenum industry is at risk if the situation continues.
The nine producers, including China Molybdenum, Jinduicheng Molybdenum, Yichun Luming Mining, Jilin Daheishan Molybdenum, and Luanchuan Longyu Molybdenum, have agreed to the 10% production cuts this year, building on a 9.18% reduction in Chinese molybdenum concentrates output last year.

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The companies have pledged to continue regulating their production capacity, lower output, and not take part in any dumping.
They have called on market participants to take an active part in building national reserve and reduce molybdenum sales.
The nine will also examine new models of establishing commercial reserves as they strive to maintain order in the molybdenum market.
They will also form a liaison committee to exchange and share industry intelligence, coordinate any course of action, come up with effective solutions to protect the interests of Chinese molybdenum market participants.
In its 2015 annual report filed to the Shanghai Stock Exchange in mid-April, Jinduicheng said Chinese molybdenum output fell 5.6% from 2014 to about 82,000 mt last year.
Global molybdenum production decreased 6.3% on the year to 246,000 mt in 2015, the company added.

• [Editor:Jiang Li Juan ]