BNamericas reported that according to Haywood Securities’ Stefan Ioannou, molybdenum prices will likely remain “subdued” in the next few years as a result of an approaching production glut.
As quoted in the market news:
Poland-based KGHM Polska Miedz’Sierra Gorda copper-molybdenum project in Chile’s northern region II alone is expected to generate roughly 50Mlb/y of molybdenum over its first three years of production, equivalent to about 10% of global annual demand of 500Mlb/y.
This is double the expected annual growth in global demand of about 5% or 25Mlb/y in the coming years, Ioannou said.
The start of production at Sierra Gorda, expected in 2014, coupled with the restart of production of a number of other major molybdenum producing mines, such as Freeport McMoRan’s (NYSE: FCX) Climax mine in the US, is “going to flip the market,” which is currently about in balance, he added.