NEW YORK Domestic molybdenum markets could experience a slight improvement this year, although the environment remains extremely difficult for the moment, Thompson Creek Metals Co. Inc. chairman and chief executive officer Kevin Loughrey told AMM.
Weak molybdenum demand and low prices coupled with a write-down associated with issues at the Denver-based companys Endako molybdenum mine in British Columbia contributed to a 2012 net loss of $546.3 million (amm.com, Feb. 25).
"Its tough now. When the (molybdenum) price drops from $35 per pound to $11.50, that really takes a bite out of us," Loughrey said.
"My only solace is, having been in this business for a long time, when things are looking really, really good you think they will be good forever. Unfortunately, theyre not. And when things are really, really bad you think they will be bad forever. Fortunately, theyre not," he said. "Weve dealt with low prices before, and we can do so again."
While Asian markets are growing slowly and Western Europe remains "terrible," North American markets are "okay but not great," Loughrey said. "Theres a lot of uncertainty and therefore caution in buying patterns (in the U.S.)."
Still, there are indications that the United States is in the early stages of a recovery, with residential construction showing signs of life as well as decent demand from auto manufacturers, he said.
"We are seeing a bit of a turnaround (in the U.S.). It just depends on where the market heads. Does the financing world open up and (start lending) to new projects? Does steel recover? Do oil and gas pick up? All those things impact moly," Loughrey said. "When the steel market improves and you see steel production increase, you will see moly improve."
Challenging molybdenum markets are "a good reason to move into copper and gold," he said, referring to Thompson Creeks Mount Milligan copper-gold project in British Columbia.
The $1.5-billion project is on schedule to begin production in the third quarter and commercial production of copper and gold in the fourth quarter, he said. "Were well advanced on construction."
The company is forecasting annual production of 89 million pounds of copper and 262,000 ounces of gold for the first six years of operation (amm.com, Nov. 9).