Will the stimulus jumpstart molybdenum?
The steel sector has been deeply impacted by the global economic climate; with an approximate 50% decline in production. Moly, as an important alloy, is following suit.
The steel sector has been deeply impacted by the global economic climate; with an approximate 50% decline in production. Moly, as an important alloy, is following suit.
Southern Copper Corp put its molybdenum forecast at 17,000 tonnes, slightly higher than last year. For full story, click here
In 2008, molybdenum cost an average of $29/lb after peaking at $30 in 2007. On a monthly basis, however, molybdenum has sold for less than $10/lb for two months now. Investment bank Dahlman Rose & Co. in New York expects molybdenum to average $12/lb this year.
As the shock waves spread around the global economy; many analysts are starting to hedge their bets on when a recovery will start. In their Global Metal’s Report released this week, Morgan Stanley gave their take on the near future for the molybdenum market.
Molybdenum prices have crashed from a high of $35 per pound at the end of October down to the recent level oft US $12 per pound. This represents the worst decline when it comes to commodity prices; a 53 percent drop to be exact.
The first week of 2009 was a sleepy one for molybdenum with thin trading volume as many customers remained on holidays. Activity in China was by far the slowest, with Chinese molybdenum oxide and ferromolybdenum producers halting spot molybdenum offers to overseas customers.
Molybdenum, a seemingly invincible metal this year finally took a hit in the fall as economic malaise spread. The alloying metal is down 65% this year, and this decline was seemingly overnight.
The global economic slowdown is affecting both the demand, and price for molybdenum. To cope, companies are planning output cuts and plotting new investment strategies. For the few companies that have a very strong financial position, they are on the look out for acquisitions.
Molybdenum has gone from an obscure metal, to a high performer garnering the attention of the LME, and then back to an undervalued alloying metal. Once an overlooked player in the investment arena, interest in moly picked up when worldwide spending on infrastructure took off, sending the metal’s price to new heights.
The Copper Metro District received a big boost towards its new fire station due to $63,000 donation by Climax Molybdenum for the project. For full story, click here For Climax’s website, click here
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