China to Continue Driving Molybdenum Demand

Jan 27, 2010, 07:30 ET from Roskill Information Services

LONDON, January 27 /PRNewswire/ --

- Roskill Information Services

- Molybdenum: Market outlook to 2014 (10th Edition, 2010)

Cutbacks by major producers, combined with stockpiling in China, resulted in a tightening of supply, causing prices to spike in mid 2009. Between July 2009 and August 2009, prices for both molybdic oxide and ferromolybdenum almost doubled, only to drop by 50% in the next two months.

From November 2009, in line with the general trend in commodity prices, molybdenum prices have increased, reaching US$15/lbMo by January 2010, an increase of almost 50%. Nevertheless, with demand expected to rebound in 2010, prices could consolidate at current levels.

China to continue driving molybdenum demand

In 2009, molybdenum consumption is estimated to have declined by as much as 9%, as end-users curtailed their requirements. Although consumption has declined on a global level, emerging markets such as China have seen demand continue to increase in 2009. Chinese consumption is estimated to have risen by around 5% in 2009.

Chinese consumption will continue to outstrip growth in the rest of the world, with an annual average rate of 9%py for the next five years, compared to accumulated growth of 2%py in the developed markets of Europe, the USA and Japan.

Steel to remain dominant end-use for molybdenum

Molybdenum is consumed mainly as oxide or ferromolybdenum in stainless and alloy steels, products for which demand has fallen significantly in the global downturn. Production of stainless steel, which accounts for around 25% of all molybdenum consumption, has declined sharply over the last two years. In 2008, output fell by 7% year-on-year, while the first three quarters of 2009 have seen production of crude stainless steel decline by around 15%, year-on-year.

The fall in production of stainless steel, however, has only taken place in developed economies. Emerging markets such as China and India have seen domestic output continue to rise. The first three quarters of 2009 saw Chinese production up by almost 20% year-on-year, while for the whole year China is forecast to produce 8-9Mt. However, 2010 is expected to see an increase in global demand and production, as world GDP recovers. World production of crude stainless steel is forecast to increase by around 8% in 2010.

After 2010 demand growth is expected to average 4%py, as the various end-uses for molybdenum consume ever larger volumes.

The drive to reduce carbon dioxide emissions from coal-fired power stations will require plants running at higher temperatures, resulting in greater demand for high end molybdenum-bearing steels. The energy market will play an important role in the future, as the growth in nuclear power stations, along with drilling for oil and gas in harsher environments, drives demand for molybdenum containing steels.

Molybdenum shortages could occur

In response to a large withdrawal of demand from the market, molybdenum producers responded with savage cuts. In 2009, global mined molybdenum output is estimated to have declined by 12%, following annual average growth of 5% for the period 2000 to 2008. Surpluses in 2008 and 2009 have been absorbed by stockpiling, mainly in China. In the longer term, molybdenum demand is expected to recover and the market may move into deficit by 2014.

With the decline in prices in late 2008, many new mining projects were slowed or suspended. As there are some forty molybdenum mine projects with combined capacity of about 170ktpy at some level of feasibility assessment, longer term supply appears to be assured.

The only new roasting plant outside China that is likely to be constructed in the short to medium term is that by Molymet at Mejillones in Chile. This will raise world capacity to more than 270ktpy, which is more than sufficient on a global basis, but there still may be localised shortages of roasting capacity.

What will be the likely impact of the LME molybdenum contract?

In February 2010, the London Metal Exchange (LME) will commence futures trading of molybdenum as part of its move to list minor metals on its exchange. The plan to turn molybdenum into an exchange traded commodity has come with mixed reviews. Many producers and consumers have voiced concerns that prices will become more volatile as a result, while others have welcomed the news.

So far Molymet is the only company to register its brands of molybdic oxide, although Jinduicheng Molybdenum, China Molybdenum, and Kwangyang Ferroalloy have also applied for registration.

Regardless of the platform used, molybdenum prices are expected to remain volatile, although following an upward trend. In 2010, prices for oxide are forecast to average US$17/lbMo, rising to above US$20/lbMo in 2011, as strong demand allows producers to increase prices. Further forward, a deficit could appear in the market by 2014, taking prices to US$40/lbMo.

    Table of Contents

    1                 Summary
    1.1               Properties, occurrence and processing
    1.2               World supply
    1.3               Consumption
    1.4               International trade
    1.5               Prices

    2                 Properties, occurrence and reserves of molybdenum
    2.1               Properties
    2.2               Occurrence and mineralogy
    2.3               Reserves and resources

    3                 Molybdenum mining and production processes
    3.1               Mining, concentrating and processing
    3.1.1             Technical grade molybdenum oxide (TMO - roasted
    3.1.2             Ferromolybdenum (FeMo)
    3.1.3             Other commercial forms of molybdenum
    3.2               Recycling of molybdenum

    4                 World molybdenum production data
    4.1               Mine production
    4.1.1             Mine production by country
    4.1.2             Molybdenum mine production by company
    4.2               Ferromolybdenum production
    4.3               Molybdenum metal and alloys
    4.4               Recycling and regeneration

    5                 Current and forecast molybdenum production capacity
    5.1               Current molybdenum production capacity
    5.1.1             Molybdenum mine capacity
    5.1.2             Roasted concentrate capacity
    5.1.3             Ferromolybdenum production capacity
    5.2               New projects and future supply of molybdenum

    6                 Molybdenum production costs
    6.1               Projected costs for 2009

    7                 Notes on molybdenum producing countries
    7.1               Argentina
    7.1.1             Minera Alumbrera
    7.1.2             Yamana Gold - Aqua Rica Project
    7.1.3             Xstrata Copper
    7.1.4             Tenke Mining
    7.1.5             Other projects
    7.2               Armenia
    7.2.1             Zangezur Copper-Molybdenum Company (Zangezur)
    7.2.2             Agarak Copper-Molybdenum Company (Agarak)
    7.2.3             Yerevan Pure Iron Plant (YPIP)
    7.2.4             Armenian Molybdenum Production (AMP)
    7.2.5             Armenian Copper Program (ACP) - Teghout
    7.3               Australia
    7.3.1             Auzex Resources
    7.3.2             Havilah Resources - Kalkaroo
    7.3.3             Moly Mines - Spinifex Ridge
    7.3.4             Thor Mining - Molyhil
    7.3.5             Queensland Ores Ltd - Wolfram Camp
    7.3.6             Other molybdenum exploration projects
    7.4               Austria
    7.4.1             Treibacher Industrie AG
    7.4.2             Plansee SE
    7.4.3             SEKOM Handelsges
    7.5               Belgium
    7.5.1             NV Sadaci SA
    7.5.2             Other molybdenum processing companies
    7.6               Brazil
    7.7               Bulgaria
    7.8               Canada
    7.8.1             Mine production of molybdenum in Canada           Thompson Creek Metals Co - Endako           Teck Resources - Highland Valley Copper           Roca Mines Inc - Max           Imperial Metals Corp - Huckleberry           Taseko Mines Ltd.
    7.8.2             New molybdenum projects in Canada           Adanac Molybdenum - Ruby Creek           Avanti Mining - Kitsault
    7.9               Chile
    7.9.1             Mine production of molybdenum in Chile           Corporacion National del Cobre de Chile (Codelco)           Antofagasta plc           Anglo American Sur           Cia Minera Dona Ines de Collahuasi           Amerigo Resources
    7.9.2             New molybdenum mining projects           Escondida           Los Andes Copper - Vizcachitas           Teck Resources - Relincho           Quadra Mining - Sierra Gorda           Pan Pacific Copper
    7.9.3             Processing of molybdenum in Chile           Molibdenos y Metales SA (Molymet)           Xstrata - Altonorte
    7.1               China
    7.10.1            Molybdenum resources in China
    7.10.2            Mine production of molybdenum          Jinduicheng Molybdenum Group Co Ltd          China Molybdenum          The molybdenum industry of the Huludao region          Qingtian Jianshi Molybdenum Chemical Co          Sino-Steel Chifeng Jinxin Mining          Sing Horn Enterprise Co          Chaoyang Jinda Molybdenum          Dalian Haiyi Chemistry Co          Jilin Daheishan Molybdenum Industry         Chengdu Molyplus Technologies         Harbin Songjiang Copper Group         Chifeng Haozhou Mining
    7.10.3            New molybdenum mining projects in China
    7.10.4            Molybdenum processing in China
    7.11              Ecuador
    7.12              France
    7.13              Germany
    7.14              Greenland
    7.14.1            Quadra Mining - Malmbjerg
    7.15              Honduras
    7.16              India
    7.17              Indonesia
    7.18              Iran
    7.18.1            National Iranian Copper Industries Co (Nicico)
    7.18.2            Zanjan Bronz Ltd
    7.19              Israel
    7.2               Japan
    7.21              Kazakhstan
    7.21.1            Molyken - Shorskoye
    7.21.2            Other molybdenum occurrences in Kazakhstan
    7.22              South Korea
    7.22.1            Oriental Minerals - Sangdong
    7.23              Laos
    7.24              Mexico
    7.24.1            Minera Mexico
    7.24.2            Molymex SA de CV
    7.24.3            Other molybdenum occurrences in Mexico
    7.25              Mongolia
    7.25.1            Erdenet Corp
    7.25.2            Shim Technology
    7.25.3            Erdene Resource Development
    7.25.4            Other projects
    7.26              Morocco
    7.27              Namibia
    7.28              Netherlands
    7.28.1            Climax Molybdenum BV
    7.29              Norway
    7.3               Pakistan
    7.31              Panama
    7.31.1            Inmet - Minera Petaquilla
    7.31.2            Cerro Colorado
    7.32              Papua New Guinea (PNG)
    7.32.1            CopperMoly - Simuku
    7.32.2            Marengo Mining - Yandera
    7.32.3            Harmony Gold - Golpu
    7.33              Peru
    7.33.1            Mine production of molybdenum in Peru          Southern Peru Copper Corporation (SPCC)          Cia Minera Antamina SA          Freeport McMoRan - Cerro Verde
    7.33.2            New molybdenum projects in Peru          Chinalco - Toromocho          Anglo American - Quellaveco and Michiquillay          Inca Pacific Resources - Magistral          Monterrico Metals - Rio Blanco          Norsemont Mining - Constancia          Northern Peru Copper Corp - Galeno          Rio Tinto - La Granja          Xstrata Copper
    7.34              Philippines
    7.34.1            Metals Exploration - Runruno
    7.34.2            Sagittarius Mines - Tampakan
    7.35              Poland
    7.35.1            Strzelecki Metals - Myszkow
    7.36              Russia
    7.36.1            Resources
    7.36.2            Mine production          Strikeforce Mining and Resources (SMR)          JSC Tyrnyauz GOK (TGOK)
    7.36.3            Other molybdenum occurrences in Russia
    7.36.4            Molybdenum processing in Russia
    7.37              Sierra Leone
    7.38              Slovakia
    7.39              South Africa
    7.4               Spain
    7.41              Sweden
    7.42              Turkey
    7.42.1            Anatolia Minerals
    7.42.2            Stratex International
    7.43              UK
    7.43.1            Climax Molybdenum UK Ltd.
    7.43.2            FMP Metallurgical UK
    7.43.3            Other molybdenum processors and suppliers in the UK
    7.44              USA
    7.44.1            Mine production of molybdenum in the USA          Freeport McMoRan Copper & Gold          Rio Tinto - Kennecott Utah Copper          Thompson Creek Metals Company USA          Montana Resources Inc          Molycorp Inc.          Mercator Minerals Ltd - Mineral Park          Golden Phoenix Minerals Inc - Ashdown Project          Quadra Mining
    7.44.2            New molybdenum projects in the USA          Eureka Moly - Mount Hope Project          Northern Dynasty Minerals/Anglo American - Pebble
                      Project          Galway Resources          Bolero Resources - Bald Butte Project          Other molybdenum occurrences in the USA
    7.44.3            Other molybdenum processors and fabricators in the USA
    7.45              Uzbekistan
    7.45.1            Almalyk Mining and Metallurgical Combine (Almalyk)
    7.45.2            Uzbek Refractory and High Temperature Metals Plant
    7.45.3            Uzmetal Technology
    7.46              Vietnam

    8                 Analysis of molybdenum international trade data
    8.1               Raw molybdenum concentrates
    8.2               Roasted molybdenum concentrates
    8.3               Molybdenum oxides and hydroxides
    8.4               International trade in ferromolybdenum
    8.5               International trade in articles and powder of
                      molybdenum metal
    8.6               Molybdenum waste and scrap

    9                 World consumption of molybdenum
    9.1               Apparent consumption of molybdenum
    9.2               Consumption of molybdenum by use
    9.2.1             Consumption of molybdenum by industry
    9.2.2             Consumption of molybdenum by use in selected countries
    9.3               Consumption of molybdenum by form

    10                Uses of molybdenum
    10.1              Use of molybdenum in steels
    10.1.1            Crude steel production
    10.1.2            Stainless steels          Types and uses of molybdenum-containing stainless steel
    10.1.3            Production of stainless steel          Stainless steel production capacity          Consumption of stainless steel
    10.1.4            Full alloy steels          Types and uses of molybdenum-containing full alloy
    10.1.5            Tool and high speed steels          Types and use of molybdenum-containing tool and high
                      speed steels          Production and consumption of tool and high speed
    10.1.6            High-strength low alloy steels          Line pipe steel          Automobiles          Construction          Gas containers and pressure vessels
    10.1.7            Carbon steels
    10.2              Catalysts
    10.2.1            Use and types of molybdenum-bearing catalysts
    10.2.2            Producers of molybdenum catalysts          Advanced Refining Technologies (ART)          Albemarle Catalysts & Nippon Ketjen          Axens Catalysts and Absorbants          Criterion Catalysts & Technologies          Haldor Tops0e A/S          Sud-Chemie Group          Other catalyst companies
    10.2.3            Catalyst regeneration and recycling          Catalyst regeneration          Catalyst recycling
    10.3              Molybdenum metal and molybdenum-based alloys
    10.3.1            Types of molybdenum-base alloys
    10.3.2            Applications of molybdenum metal and alloys          LCD panels and solar cells          Lighting industry          Electronics industry          Materials processing and thermal spray coating          High temperatures furnaces and equipment          Glass manufacturing          Aerospace and defence          Nuclear industry
    10.3.3            Producers and fabricators of molybdenum metals and
                      alloys          ALMT Corp. (Allied Materials)          Elmet Technologies          General Electric Consumer Products (GECP)          Global Tungsten & Powders          H.C. Starck          Jing Dui Cheng Molybdenum Group (JDC)          Metallisation          Philips Advanced Metal Solutions          Plansee SE         Polema JSC         Toho Kinzoku Co Ltd         Other companies
    10.4              High-performance alloys (superalloys)
    10.4.1            Types and use of molybdenum-bearing HPA          Nickel-based HPA          Cobalt-based HPA          Iron-nickel-based HPA
    10.4.2            Markets for HPA/superalloys          Aerospace applications          Non-aerospace applications
    10.5              Titanium-based alloys
    10.6              Use of molybdenum in cast iron
    10.6.1            Production and consumption of cast iron
    10.7              Use of molybdenum in greases and lubricants
    10.7.1            Grease production and producers
    10.8              Use of molybdenum in pigments and corrosion inhibitors
    10.8.1            Pigments/corrosion inhibitors
    10.8.2            Corrosion inhibitors
    10.9              Minor uses of molybdenum chemicals

    11                Outlook for molybdenum consumption by product to 2014
    11.1              Stainless steel
    11.2              Full alloy steels
    11.3              Tool and high speed steels
    11.4              HSLA steel
    11.5              Carbon steel
    11.6              Catalysts
    11.7              Molybdenum metal and molybdenum alloy products
    11.8              High performance/superalloys
    11.9              Cast iron
    11.1              Grease and lubricants

    12                Supply and demand of molybdenum

    13                Molybdenum prices
    13.1              Comparison of contract and free market prices, 2007 to
    13.2              Historic trends in free market prices
    13.3              Concentrate prices
    13.4              Comparison of European and US prices
    13.5              Outlook for molybdenum prices

Molybdenum: Market outlook to 2014 (10th Edition, 2010) is available at GBP3500 / US $7000 / 5600 Euros from Roskill Information Services Ltd, 27a Leopold Road, London SW19 7BB, England.

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