Global demand for molybdenum bounced back from the impact of the global economic downturn, growing by just over 11% in 2010 and a further 9% in 2011 according to a new report from Roskill, Molybdenum: Market Outlook to 2016.
China now accounts for around 31% of global moly demand and its growth rates continue to outpace those in other countries. While global demand for molybdenum is forecast to grow at an average of 4.6% per year to 2016, Chinese demand is forecast to increase by 7.5% per year. The principal engines of growth will be increased use of stainless and other steels containing molybdenum in process, power and desalination plants, in oil and gas production and distribution, and in motor vehicle components.
Primary moly mines were the first to respond to the recovery in demand in 2010, but in 2011 growth in output of by-product molybdenum from copper mines outpaced growth from primary mines. In 2012, mine capacity is sufficient to meet demand and supply is likely to show a surplus over the next three years. Roskill lists some 60 new projects and expansions that could potentially produce molybdenum, yielding an additional 240,000 metric tons per year (mt/y), indicating that long term mine supply is assured.
Around 33% of the new projects identified in 2012 are located in North America, 28% in Central and South America, and 10% in China. In the next two years, by-product output is likely to grow at a higher rate, but from 2014 new Chinese molybdenum-only projects will redress the balance. In the past, insufficient roasting capacity has resulted in a bottleneck, but additional capacity has been installed and further additions are under construction in Chile, China and the United States by Codelco, Molymet, China Molybdenum and JDC.
The longer term price prospects for molybdenum appear stable given apparent adequate existing mine capacity, and 140,000 mt/y of relatively low cost by-product molybdenum in new copper-molybdenum mining projects under review, plus some 100,000 mt/y in moly-driven projects. Roskill notes, however, positive features in the global market for molybdenum is expected to grow by some 60,000 mt/y in the years to 2016, and many projects are likely to be delayed in coming to fruition. Furthermore, production costs in excess of $12/lb in the large Chinese molybdenum-only mining industry, probably provide an effective floor for prices.
Molybdenum: Market Outlook to 2016, 11th edition 2012 is available at £4,500/€5,900/US$7,500 from Roskill Information Services Ltd. (Tel: +44 20 8417 8417 0087; Fax: +44 20 8417 8417 1308; Email: info@roskill.co.uk; Web www.roskill.com). For further information on this report, please contact Judith Chegwidden (judith@roskill.co.uk).
