?Molybdenum growth rates will exceed global GDP rates to 2016
Global demand for molybdenum bounced back from the impact of the global economic downturn, growing by just over 11% in 2010 and a further 9% in 2011 according to a new report from Roskill. China now accounts for around 31% of global molybdenum demand and its growth rates continue to outpace those in other countries. While global demand for molybdenum is forecast to grow at an average of 4.6%py to 2016, Chinese demand is forecast to increase by 7.5%py. The principal engines of growth will be increased use of stainless and other steels containing molybdenum in process, power and desalination plants, in oil and gas production and distribution and in motor vehicle components. The greater use of molybdenum steels, high performance alloys and catalysts, combined with robust growth in the economies of the 'BRIC' countries and other countries in Asia and South America, will ensure growing future demand for molybdenum.
About 7% of stainless steel produced contains molybdenum. Grade 316, containing between 2% and 3% Mo is by the most widely used, largely in medium level corrosive environments such as external architectural applications. There is also growing use of "super" grades with higher levels of molybdenum in process, petrochemical and power plants and in the oil and gas sector.
Mine capacity sufficient to meet demand until 2015
Primary molybdenum mines were the first to respond to the recovery in demand in 2010, but in 2011 growth in output of by-product molybdenum from copper mines outpaced growth from primary mines. In 2012, mine capacity is sufficient to meet demand and supply is likely to show a surplus over the next three years. Roskill lists some sixty new projects and expansions that could potentially produce molybdenum, yielding an additional 240ktpy, indicating that long term mine supply is assured. Around 33% of new projects identified in 2012 are located in North America, 28% in Central and South America and 10% in China. In the next two years by-product output is likely to grow at a higher rate, but from 2014 new Chinese molybdenum-only projects will redress the balance. In the past insufficient roasting capacity has resulted in a bottleneck, but additional capacity has been installed and further additions are under construction in Chile, China and the USA by Codelco, Molymet, China Molybdenum and JDC.
Longer term price outlook
The longer term price prospects for molybdenum appear stable given apparent adequate existing mine capacity, and 140ktpy of relatively low cost by-product molybdenum in new copper-molybdenum mining projects under review, plus some 100ktpy in molybdenum-driven projects. Roskill notes, however, positive features in that the global market for molybdenum is expected to grow by some 60ktpy in the years to 2016, and that many projects are likely to be delayed in coming to fruition. Furthermore, production costs in excess of US$12/lb in the large Chinese molybdenum-only mining industry, probably provide an effective floor for prices.
Molybdenum: Market Outlook to 2016, 11th edition 2012 is available at £4,500 / €5,900 / US$7,500 from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL UK. Tel: +44-20-8417-8417-0087; Fax: +44-20-8417-8417-1308; email: [email protected]; web http://www.roskill.com
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