Strong global demand combined with limited additional supply has sent prices up some 400% over the past few years. After years of trading around $5.00 per pound, the molybdenum market moved into a deficit sending pricing surging in late 2004. Since then molybdenum prices have remained firm trading between $24 and $40 per pound. Strong continued global demand coupled with scarce new molybdenum roasting capacity anticipated to come onstream over the next few years, bode well for the future molybdenum market.
It is important to note that prices of substitute metals have increased also.
Growth in Global Molydenum Has Been Strong
Industry experts remain constructive on the outlook for molybdenum pricing through 2010 owing to global demand of 4% to 7% coupled. The global market for molybdenum is estimated to have grown from just over 100,000 metric tons in 1990 to over 180,000 tonnes (or roughly 400 million pounds) in 2005, an average year-on-year growth rate of 4.8%. Roughly 75% of the molybdenum consumed globally is used in the production of steel, cast alloys, and superalloys increasing:
Hardness and strength
Corrosion resistance
Ability to withstand exposure to high temperature levels
Typically molybdenum is used along with other metals as an alloy, which would include but not limited to tungsten, chromium, manganese, and nickel. Over the past several years the large increase in global steel production, particularly in China, is cited as a primary reason for the steep rise in the molybdenum price. The following lists some longer term trends that bode well for the demand side of the equation for molybdenum usage:
The construction of longer distance higher pressured pipelines for the transport of oil and gas
Vehicles that are powered by fuel cells
Control of greenhouse emissions
The reduction of the weight of vehicles and higher usage of higher strength materials to boost energy efficiency
The increased usage of diesel engines for improved fuel efficiency
Power plants operating at higher temperatures for better efficiency and reduced emissions
Most Molybdenum Comes From Copper Mines
Industry estimates that annual global mined production of molybdenum amounted to just over 180,000 metric tons in 2005. It is also estimated that over 60% of annual mined production of molybdenum comes as a byproduct most commonly associated as a byproduct with copper production. The five largest producers consisting of the United States, Chile, Peru, Canada and Chile account for over 85% of world molybdenum mine production for the past decade.
Current Molybdenum Price Week of August 15, 2008 $33.00/lb
