After holding its ground much longer than other base metals, molybdenum’s price point has given way to the global economic current. The metal was stable in the $32 to $35 a pound range for much of this year; holding its value compared to the price plummet of the other base metals.
Japan wants to test the moly market, and will do so by issuing a temporary cut in the November nickel stainless molybdenum (SUS316) steel output. Output will be cut approximately 10%, and for the time being, the curb in production will only last a month to see how the market reacts.
Molybdenum has been a strong performer in 2008; in fact it is just recently that the metal experienced a little downside. The dip in prices could be attributed to the negative market sentiment, as moly’s fundamentals are still strong.
The market volatility over the past two weeks has finally it moly. The alloying metal has held its own for months, while most of the other metals declined rapidly as news about the downturn in the economy permeated the markets.
The molybdenum market is bracing for price increases in September on increased buying activity from stainless steel mills and mounting concerns over a consistent supply. The availability of ferromolybdenum remains tight as output falls at a number of major producers.
When investors first turn to metals to diversify their portfolio, they usually stick to the classic metals- silver, gold, and copper. The exotic metals- molybdenum, uranium, and tungsten are a rare first approach.
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