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.
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.
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 future of Molybdenum demand gained some extra security with the likelihood of new applications in the short term. Even as other metal prices eased off in recent weeks and months, molybdenum has held its highs, in part because of its wide gamut of uses.
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