The moly price in early November 2018 was approximately $12.03/lb, which was up from $10.25/lb at year end 2017 and $6.70/lb at year end 2016, according to Platts. The moly price reached a high of $13/lb in early March 2018, which was a level last seen in 2014. 2018 is poised to be the strongest year in moly prices in four years.
As noted in the Company’s October 11, 2018 news release about moly price resilience and demand drivers, moly has been a consistent standout among metals during 2018 as the moly price rose 11% during 3Q 2018. Further moly market commentary is also available in the CEO’s October 10, 2018 Moly Bits issue.
World stainless steel production, which uses more moly than other forms of steel, increased 13% in the first half 2018 over the first half 2017, according to the International Stainless-Steel Forum (“ISSF”). China, the world’s largest stainless steel producer, saw a 13% jump in its production.
The global liquid natural gas demand is growing at 2% annually between 2018 and 2035 as projected by Shell, with associated increase in global trade requiring more moly-alloyed steel infrastructure. There has been a 15% increase in North American petroleum exploration and production capital budgets and an 8% increase for the rest of the world in 2018 over 2017, according to Barclay Research global spending survey of the industry as reported by Oil & Gas Journal.
During the first nine months of 2018, the moly price has been volatile, trading in a range from a high of $13/lb on March 2, 2018 to a low of $10.60 on June 28, 2018.
Figure 1: Molybdenum Weekly Spot Price (10/10/2011-11/2/2018)
2017 Moly Market
During 2017, molybdenum demand benefitted from increased global steel output driven by a strong rebound in oil and gas drilling, particularly in North America, as well as robust economic expansion in China, emerging markets, the U.S. and Europe.
The molybdenum price rose strongly in 2017. In the first half of 2017, molybdenum prices surged to at just under $9 per pound and then decreased to the $7-$8 range mid-2017. The molybdenum price rose strongly again in late 2017 and has continued to show strength to date in 2018. The global molybdenum oxide average weekly price on March 2, 2018 at $12.83 per pound is a 26 percent increase from the year-end 2017 weekly price of $10.15 and 90% higher than the year-end 2016 weekly price of $7.03, according to Platts. The current spot price over $12 per pound reflects a price level last seen in 2014.
General Moly believes the molybdenum market is in the early stages of an extended recovery and view the long-term outlook for our business positively, supported by limitations on long-term supplies of molybdenum, the requirements for molybdenum in the steel industry, and a recovery in the oil and gas industry. Future molybdenum prices are expected to be volatile and are likely to be influenced by demand from China and emerging markets, as well as the strength or weakness of the U.S. dollar, economic activity in the U.S. and other industrialized countries, the timing of the development of new supplies of molybdenum, and global production levels.
Uses and Demand
Figure 2: Molybdenum First Use
Source: CPM Group
Figure 3: Diverse End Uses of Moly
Figure 4: Global Consumption of Moly
Source: CPM Group, International Molybdenum Association
Figure 5: CPM Group Moly Base Case: World Supply and Demand (Annual, Projected through 2026p)
Source: CPM Group
Figure 6: Primary Mines Key to Fulfill Future Supply
Source: Raw Materials Data, International Molybdenum Association, World Bureau of Metal Statistics and CPM Group
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