|Was the moly price a fait accompli? This report from NRCAN seems to suggest that what people are saying about a temporary increase in the moly price is simply not true, nor was this inexorable price increase not foreseen. Here in devastating 20-20 hindsight (for us) is a late 1990's report on Moly.|
"Finally, Codelco-Chile drum oxide prices increased from US$6.61/kg in January 1994 to US$19.84/kg at year-end. Another jump brought the price to US$44.09/kg in January 1995. It stayed at that level until August when it decreased radically to US$13.00/kg. The price in 1996 stayed constant at US$13.00/kg for the entire year.
Canadian molybdenum production is forecast to decrease slightly in 1997, even with the start-up of the new Huckleberry mine, as the grade of ore that will be mined will be lower at the Endako mine and at Highland Valley Copper.
Over the longer term, production should remain stable unless new projects are developed and become operational, or current producers reduce or cease production. Other Canadian projects offering potential to add to the national production capacity of molybdenum include the Casino project in the Yukon; the Crow-Rea, Salal Creek and Mac properties in British Columbia; Mount Pleasant in southern New Brunswick; and a deposit located 50 km southeast of Timmins, Ontario.
Domestic consumption of molybdenum in China is growing rapidly and should continue to increase towards the year 2000 with an estimated consumption of 13 000-14 000 t/y. The growing domestic demand will directly affect China's molybdenum trade, causing a reduction in its exports to support domestic demand.
While China will remain the second largest producer of molybdenum in the world, Canada should become the third largest exporter by the end of the century, keeping its fourth-place ranking as a world producer. In the longer term, over the next five to ten years, demand for molybdenum should continue to increase. This expectation of higher consumption is reasonable because, even at prices of US$17-$22/kg, molybdenum is a bargain alloying element compared to alternative elements.
The expected long-term availability of molybdenum at competitive prices, in combination with its versatile performance, should result in a continuing increase in its use.
About 70% of world molybdenum is produced as a byproduct or co-product of copper mining. This production is price-inelastic and is generally sold for whatever the market offers. In fact, the supply of by-product molybdenum is a function of the demand for, and price of, copper. On the other hand, future supply from primary molybdenum mines will gradually increase since many new copper discoveries contain less molybdenum. The result will be that, contrary to present figures where most of the molybdenum is produced as a by-product, primary molybdenum mines will supply the major part of the market in the longer term. Notes: (1) For definitions and valuation of mineral production, shipments and trade, please refer to Chapter 70. (2) Information in this review was current as of February 1, 1997."
So you heard it first here, from, what we have to called in retrospect, "the experts". Moly, as some suspect is on a long term, perhaps ten years or more, high-demand curve. On a break-out so to speak. Everyone in the metal business it seems knew it ten years ago, now you can know it.