Rising molybdenum price should be good news by Ian Mclelland
It has been an interesting 12 months for molybdenum focused mining companies. Thompson Creek (NYSE:TC), one of the world?s largest primary molybdenum producers, is an excellent case in point. During the commodity boom, the company was trading near record levels as the spot price for molybdenum tested $30/lb. When the bubble began to burst in the second half of 2008, molybdenum prices were slow to react, with the more ?liquid? metals like copper, nickel and iron ore moving sharply lower first. Molybdenum prices did catch up however; by summer 2009 spot prices were hovering around $10/lb. The volatile prices were not surprisingly reflected in Thompson Creek?s share price.
However, 2010 has started on a much brighter note for molybdenum producers. Thompson Creek?s share price has recovered from a 52 week low of just $2.69 to a high of $15.64 earlier this month, buoyed by more bullish analyst forecasts for molybdenum. Just last month, JP Morgan analysts forecast that molybdenum would rise from around $15/lb currently to $21/lb by the end of the year, and could rise to $24/lb by the end of 2011. For producers, this is clearly good news. But has the more bullish outlook for molybdenum prices trickled down to junior explorers or would-be developers?
The answer, as always, is complicated. Some mining companies with more advanced projects have benefited from higher prices and have managed to raise money and secure partners, including Moly Mines (TSX/ASX: MOL). However, many other molybdenum focused juniors are still struggling to generate interest. Etc, etc...
T.
MOL Price at posting:
95.5¢ Sentiment: ST Buy Disclosure: Held
