Molybdenum News Center

Multiple Factors Boost Global Molybdenum Spot Price

Global molybdenum spot price has increased 25 per cent year to date to $12.83 per pound, according to General Moly, Inc., the only western-exchange listed, pure-play molybdenum mineral development company. The rise benefits from improving molybdenum demand, recovery of global economic growth and well performance in China’ market.

The current molybdenum price provided by Platts almost tripled from its low of $4.30 in October 2015. In 2017, moly was the second best performing metal after cobalt amongst BMO Capital Market's Global Commodities' universe of metals and mining.  

Of the broader industrial metal complex, moly is most akin to nickel, which is a smaller component of the most common industrial metals indexes, the Bloomberg Commodities' Industrial Metals Index and the S&P GSCI Industrial Metals Index. Both indexes are up over 45 percent for the past two years. Other components of these indexes include copper, aluminum and zinc, with the addition of lead in SPGSINTR.

Compelling market factors that the Company believes foreshadow an industrial metals resurgence include a synchronized global market expansion, further growth in China and a late stage business cycle with high metals' demand.

Bruce D. Hansen, Chief Executive Officer of General Moly, said, "Moly can be called a late stage industrial metal. We believe the moly price recovery, which began slowly in 2016, has accelerated in the past few months and still has future appreciation potential."

The World Bank projects global economic expansion at a solid 3.1 percent for 2018, after a better than anticipated 3 percent growth in 2017, "as the recovery in investment, manufacturing and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices," according to the World Bank's January 2018 news release.

More than 70 percent of moly's first use is for steel production. China uses approximately a third of global moly and produces more than one-third of global moly supply, according to the CPM Group, a leading commodities research and consulting firm in New York. China is also the world's largest steel producer.

China recently issued tougher regulations raising the standards for domestic steel rebar and long steel products, according to news reports. There is a higher concentration of moly used in long products such as rebar, rods and billets compared with flat products such as coils, sheet and slabs. Higher grade long steel products will require more moly for strength.

In its October 2017 molybdenum market update, the CPM Group estimates that the supply and demand will near equilibrium in 2018 with a slight surplus and anticipates that the market in 2019 will tip into deficit, which will be exacerbated in 2020 and 2021. Such timing would align with the potential development of the Company's Mt. Hope Project in central Nevada, upon a sustained improvement in the moly price.

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