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Molybdenum Production By Nine Major Companies In CY 2009 Decreased Only By 6%
= Owing To Increased Exports For China, Extent Of Decrease Shrunk Compared To That As Initially Forecasted
The total quantity of molybdenum in molybdenum concentrates produced by nine major molybdenum companies of the world in the calender year (January - December) of 2009 had a decrease of only 6% compared with that in the preceding year of 2008. There was a strong view in the market that, owing to a crisis of the economy in the western countries caused by a sudden occurrence of the Lehman shock, the output of molybdenum in 2009 as anticipated at the beginning of the year would be inevitable to have a decline of more than 30% from that in 2008. However, in consequence of that China imported an extraordinary quantity of molybdenum as started from January - March quarter of 2009, an extent of the reduction in molybdenum production of 2009 at major molybdenum mines in the western countries could have stayed at only 6%. The quantities of molybdenum in molybdenum concentrates produced by major molybdenum companies of the world in the calender year of 2009 were as per the table attached hereto.

Namely, in the calender year of 2009, North American region produced 111.51 million lbs. of Mo in concentrates, having decreased by 12.2% compared with that in the preceding year of 2008, and Central and South American region produced 119.90 million lbs. of Mo in concentrates, which had maintained a similar level to that in 2008. On the other hand, China imported 75.54 million lbs. of Mo from the western countries in the calender year of 2009, having shared nearly 18% of the world consumption of molybdenum (410 - 420 million lbs.) as presumed. As China also exported molybdenum in the same year, the net quantity of molybdenum imported by China in 2009 had become 63.50 million lbs. of Mo.

The extraordinary and concentrated purchases of molybdenum done by China in 2009 had relieved directly or indirectly molybdenum mines in the western countries but it is supposed that part of these purchases would have included the cargoes to be stockpiled in China. On the other hand, international prices of molybdenum products suddenly commenced to fall from October of 2008 and this change of the situation related deeply with the active purchases of molybdenum by China, because an existence of the nominal demand for molybdenum in speculation was not negligible. The price of molybdenum oxide in the international market as of the end September of 2008 was US$30 per lb. of Mo but that as the mid April of 2009 came down to US$7.80, having fallen considerably by 74% for 6 months.

This sharp fall of price for molybdenum oxide caused to lose a power to be competitive internationally for Chinese molybdenum products, cost of which is generally estimated at US$12 - 13 per lb. of Mo, and steel companies in China have more inclined to import molybdenum from overseas sources. The averaged price of molybdenum oxide in 2009 was US$11 per lb. of Mo, having fallen by 62% from that (US$29) in 2008, but there was an opinion in the market that molybdenum mines in the western world to be supposedly payable for US$11 in 2009 would have been restricted.

However, many of molybdenum mines in the western countries are copper - molybdenum complex mines and price of copper cathodes in 2009 had stayed at US$2.34 per lb. on the average, having fallen by 26% from that (US$3.17) in 2008. Therefore, these copper - molybdenum complex mines were still able to reckon a profit as a whole. However, owing to a sharp fall of molybdenum prices as seen in the first half of 2009, such primary molybdenum mines as Henderson mine, Thompson Creek mine, and so on should be difficult to reckon a profit for that period. Many of molybdenum mines in China have comprised of primary molybdenum mines and delayed to modernize, excluding part of mines such as Jinduicheng molybdenum mine. Incidentally, in view of the countermeasures for environmental pollution being proceeded in China, this country has still left the problems to be competitive for sales of molybdenum products in the international market.

China is anticipated to be still the country to consume a large quantity of molybdenum even in 2010 and thought to continue their imports of molybdenum from the western countries. Therefore, China has exhibited a substantial existence in the world market of molybdenum. When China hesitated or held back to purchase molybdenum as seen in the second half of 2009, molybdenum prices in the international market had fallen at the same time. However, in 2010, China is estimated to produce 600 million tons of crude steel (compared with 528 million tons in 2008) and 10 million tons of crude stainless steel (compared to 8.89 million tons in 2008) respectively and, accordingly, the active demand for steels from automobile industry and public investment in China is expected. Therefore, it is certain that China will be a big buyer of molybdenum in the world.
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last modified : Thu 25 Feb, 2010 [10:06]
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