Base metals, including copper and molybdenum, and metals that double as both precious and industrial metals, such as platinum and palladium, are still in the competition to outdo last year's strength - and in the very least, have a great chance at extending their winning streak.
The outlook for the supply-and-demand equation over the next two years looks "increasingly favorable, with a sharp rebound in global vehicle production, auto-maker restocking and continued investment demand driving demand" for the two metals, Deutsche Bank analysts said.
Molybdenum, as well, is one of the more "obscure metals" with its own "unique scarcity aspect" and lack-of-substitution characteristic, said Chris Mayer, editor of Agora Financials Capital and Crisis. The metal is used to reinforce steel.
"With moly, there just aren't that many quality moly mines or miners out there," said Mayer. "It's a relatively small market and because, in most projects, the amount of moly used is quite small compared to other materials," there is little incentive to try to find a substitute, even if the price doubled or tripled.
T. And it just might do that. J.P. Morgan said Thursday it expects prices for the metal to rise 55% to $24 per pound by the fourth quarter of 2011.
MOL Price at posting:
98.5¢ Sentiment: ST Buy Disclosure: Held
