Market

The molybdenum price at this update in early May 2018 was approximately $12.40/lb, which is up from $10.25/lb at year end 2017 and $6.70 /lb at yearend 2016, according to Platts at the time of this report. The molybdenum price reached a high of $13.00/lb in early March 2018, which was a level last seen in 2014.

The molybdenum price has been generally strong since 2017 when it was the second best performing metal price after cobalt among most metals. The 2017 year low was $6.85/lb at the beginning of the year and the year high was $10.25/lb at the end of the year, with volatile prices throughout most of the year until a late year surge to double digits.

Approximately 70% of molybdenum’s first use is for steel production as moly is a premier alloy to strengthen steel and make it corrosion resistant. Demand has been strong for moly due to increased output of steel containing moly, driven by a continued robust recovery of the oil and gas industry. Rising oil and gas prices have driven higher drilling and capital investment by the industry which creates increased specialty steel and high strength tubular steel demand.

In addition, global economic and infrastructure growth, particularly in China, India and emerging economies, remained strong through 2017 and moderating slightly into the first quarter of 2018.

The J.P. Morgan Global Manufacturing PMI moved up slightly to 53.5 in April 2018 from the six-month low of 53.3 in March 2018, marking 26 straight months of global expansion.

On the supply side, the CPM Group, a commodities research firm in New York, estimates that the molybdenum market will near equilibrium with a slight surplus in 2018. CPM projects that molybdenum will tip into deficit in 2019 which will be exacerbated in 2020 and 2021.

Figure 1: Molybdenum Weekly Spot Price (1/4/2007-4/27/2018)

Source: Platts

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.

For more about the current molybdenum market, please refer to the latest quarterly financial results news release or presentation.

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

 

Supply

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

More Information

For more information about the molybdenum, please refer to: