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Quantities Of Molybdenum Produced At Major Moly Mines In Jan. - Sep. 2009
= Output In North - South America Decreased By 11%, Special Procurements From China Sustained Mo Production
The quantities of molybdenum in molybdenum concentrates produced at major molybdenum mines in the western world (North America and South America) for the first 9 months (January - September) of 2009 were as per the table attached hereto.

Namely, the total quantity of molybdenum in concentrates produced in the western world for January - September of 2009 reached 171.39 million lbs., having decreased by 11.6% compared with that (193.97 million lbs.) produced for the same period of 2008. The world consumption of molybdenum in the calendar year (January - December) of 2009 is anticipated to have a decrease of 25 - 30% compared to that in the preceding year of 2008 and, therefore, an extent of the reduction in molybdenum production at major mines is supposed to become restrictive in comparison with a decline of molybdenum consumption.

China exported molybdenum on a scale of approximately 30 million lbs. at least in January - September of 2008 but suddenly turned from January of 2009 to the country to import molybdenum on net quantity base and this gap on supply and demand of molybdenum caused to avoid a drastic change of operations at major molybdenum mines in the western world. Market price of molybdenum oxide once fell from US$30 per lb. of Mo to a very low level of US$8.50 but the current oxide price is US$10.50 per lb. of Mo and positive imports of molybdenum by China have effected to sustain molybdenum prices on a certain level.

The world consumption of molybdenum in 2008 was estimated at 470 million lbs. on Mo content base and that in 2009 was anticipated at the beginning of the year to decrease to 350 million lbs. of Mo. Nevertheless, the reason, why a reduction in molybdenum production at major molybdenum mines in the western countries calmed down on a comparatively insignificant level, was only due to the Chinese factors.

China had been importing molybdenum on a pace of 7 million lbs. per month on the average from the western countries during January to September of 2009 but inclined to decrease their imports of molybdenum from July. Incidentally, molybdenum prices started to fall. The quantities (on material base) of molybdenum imported by China in the recent months were <> in July : 7,152 tons, <> in August : 6,122 tons and <> in September : 5,067 tons. The imports of molybdenum by China in October - December quarter of 2009 are forecasted to see a tendency to decrease.

China is supposed to produce 2.27 million tons of crude stainless steel in October - December quarter of 2009, which will decrease by 13 - 15% compared with that in the preceding quarter of July - September. However, in comparison with the output of crude stainless steel in China for the same quarter of 2008, the production of crude stainless steel by China in the fourth quarter of 2009 is anticipated to increase by 60% and this country has still maintained definitely a high level on production of stainless steel compared with those in other countries of the western world. It is a clear case that China has overbought molybdenum, and, in addition to the actual quantity of molybdenum to be demanded at steel mills in China, traders have purchased molybdenum on their speculation in expectation of a rise of molybdenum prices for the near future and these purchases of molybdenum by traders have turned to excessive stocks.

However, as seen from the quantities of molybdenum produced at major molybdenum mines in the western countries for January - September of 2009, the output of molybdenum in the western world once reached a peak of 263 million lbs. in 2007 but, after that, turned to a basic tone to decrease in 2008 and 2009. The producers to recover molybdenum as by-product in the process of copper production have given a priority to the cost for copper production and mined copper rich deposits, having reacted to a reduction of molybdenum production. In addition, China is the largest country in the world to produce molybdenum at primary mines but has kept a basic tone to reduce molybdenum produce and, therefore, there is a view in the market that, if the world production of crude steel revives, the global situation of molybdenum will change again to a short supply.
last modified : Thu 19 Nov, 2009 [10:04]
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