Molybdenum prices are continuing to slide, reflecting the market's poor fundamentals. But there is debate within the marketplace about futures prices since some analysts say they weaken further in early 2010 while at least one producers see a demand surge ahead.
Steel mills are working down moly inventories this month and ordering little new stock, according to alloys/ferroalloys buyers at two steel mills, so the spot price have slipped to an average $10.75/lb this month from an average $11.01 in November and the peak of $16.64 in August.
Last summer, the mills were buying moly extensively just prior to the dramatic pickup in weekly carbon steelmaking output that has since stalled. Atop that, "the mooted revival in the stainless steel industry has failed to materialize," says independent consultant Angus MacMillan.
Traders have told AMM.com they expect business to be slow through year's end, which is similar to the commentary from those responding to this month's Purchasing.com buyers' survey. They see December as a lackluster buying for molybdenum. That meshes with a trader's comment to AMM.com that "December is going to be a tough month because deliveries are going to be cut back because of the holidays and people don't want to hold inventories toward the end of the year."
Looking ahead, Kevin Loughrey, CEO of moly producer Thompson Creek Metals, tells a mining conference in New York that steelmaking activity likely will pick up in January, raising molybdenum demand. He says the Colorado-based company expects demand to increase due to recovering economic activity and new uses for the metal, while supply could be constrained by delayed development of new mines caused by the global financial crisis. Loughrey expects global demand for moly to rise to 600 million lbs by 2015 from about 460 million lbs this year.
Source: Purchasing.com
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