NEW YORK Kennecott Utah Copper has not declared force majeure for its molybdenum mining and processing operations, with the company working through inventories and expecting to resume mining within 10 days.
While the Rio Tinto Plc division has declared force majeure for its copper operations after an April 10 wall slide forced the company to suspend mining at its Bingham Canyon facility (amm.com, April 16), a company source emphasized to AMM that force majeure has not been declared for molybdenum production.
"We are evaluating moly, but we havent made any decisions. Theres a real chance we will not declare force majeure," he said. "We have several options ahead of us in terms of both copper and moly, and well be mining again probably in the next 10 days. We have an inventory theyll be working through to produce moly concentrate over the next seven to 10 days."
Kennecott will cover its long-term commitments first, "so we wont be active in the spot market for the foreseeable future," he added.
The majority of market sources contacted by AMM said that molybdic oxide and ferromolybdenum spot prices were unlikely to be impacted significantly by the disruption to Kennecotts production.
"I dont think its a problem getting material. Theres so much concentrate, oxide and ferromolybdenum out there, and so few inquiries right now," one trader said, adding that other players in the U.S. market may try to capitalize on Kennecotts absence with aggressive selling.
"Demand on the moly side is so tepid, and I think the market has been slightly oversupplied, so it will take some time to change," a second trader said.
The Kennecott source agreed that free-market spot prices were unlikely to be affected. "There is still a surplus in the market with or without Kennecott online," he said.
However, a third trader said that he does foresee an impact on molybdic oxide and ferromolybdenum prices in the near-term. "Its a lot of material being taken out of the hands of the most aggressive seller in the market," he said.
Molybdic oxide was trading in a range of $10.90 to $11.30 per pound when markets were last assessed by AMM on April 11, while ferromolybdenum prices were in a range of $11.90 to $12.35 per pound.