NEW YORK Thompson Creek
Metals Co. Inc. expects molybdenum demand to rise between 4 and
6 percent annually, outpacing the growth of supply sources
through 2020, according to chairman and chief executive officer
"(Freeport-McMoRan Copper &
Gold Inc.s) Climax is the only primary molybdenum mine to
come on in the near term, as rising capital costs and
permitting delays hinder other projects," he said during the
Denver-based companys first-quarter earnings call.
Climax is expected to start
operations this year and ramp up to production of 20 million
pounds by 2013. The mine can produce more than 30 million
pounds, but Freeport, which is already a significant molybdenum
producer, has said it will tailor production levels to market
conditions (AMM, Oct. 21).
"I havent seen any
material from Climax in the market," one trader said,
suggesting a slow ramp-up at the mine.
The other major primary mine in
development, General Moly Inc.s 40-million-pound-per-year
Mount Hope project in Nevada, has faced permitting delays
(AMM, May 3), with the earliest possible start-up now
in the second quarter of 2014.
Global supplies have also been
"Chinese net exports continue to
play less of a role in the moly(bdenum) trade," Loughrey said,
adding that new South American copper mines, most of which will
produce molybdenum as a by-product, are also coming on-stream
more slowly than expected.
"(KGHM Polska Miedz SAs)
Sierra Gorda is expected to come on in 2015," he said, after
some estimates cited by AMM sister publication
Metal Bulletin that the mine could be operational by
Loughrey pointed to growing
demand from emerging economies such as China and India, as well
as rising steel production rates in the domestic markets as
positive indicators for consumption.
"Steel production rates in the
U.S. are strengthening, and we believe they will continue to do
so in the near term," he said.
In recent weeks, capacity
utilization in the domestic steel industry climbed more than 80
percent for the first time since October 2008.
This bullish view on
fundamentals hasnt yet affected prices, however. Molybic
oxide is trading between $14.10 and $14.30 per pound, down from
$17 to $17.50 per pound at the same time last year.