NEW YORK Molybdenum prices wont improve without an economic catalyst to boost global demand, and Thompson Creek Metals Co. Inc. is unlikely to resume stripping at its namesake mine until prices improve, chairman and chief executive officer Kevin Loughrey told AMM
Loughrey acknowledged that falling molybdenum prices had hurt Denver-based Thompson Creeks first-quarter earnings, leaving the company vexed (amm.com, May 9
). It is very frustrating, but you wouldnt find a person here who is surprised, he said. Its a mining business. We sell a commodity over which we have no control in the price, so you just have to put your nose down and do the best you can.
While Loughrey does expect pricing to improve in the near future, when exactly things will improve is beyond the capabilities of my myopic crystal ball, he said.
Whats holding back the moly market in terms of pricing is weakness on the demand side. We had anticipated growth year over-year, but that additional moly consumption in the main just hasnt happened. So youre in an oversupply situation, he said. Consequently, you end up with very little moly being traded in spot markets and it stagnates. We need some catalyst in the world economic engine to bring demand back up.
The drop in molybdenum prices over the past year is also likely to prolong the suspension of stripping activity at the Thompson Creek Mine, which began in October 2012 (amm.com, Oct. 3
Right now were making good money at Thompson Creek despite the fact that prices are low, but well run out of ore at the end of 2014 if we dont recommence stripping. We need a price better than (the current one) to recommence stripping, but its not just the price. We also would need a sense that the price will move ahead for a while. If we dont do that, by 2015, well be in care and maintenance, he said. AMMs
molybdic oxide price is currently in a range of $10.90 to $11.30 per pound.
Meanwhile, Loughrey said that the company is continuing the search for his replacement as chief executive officer ahead of his retirement (amm.com, Nov. 9
). He recently agreed to remain as chairman for an additional year.
So far it hasnt felt like Im in the course of retiring. The effort to find a replacement CEO is moving: There has been a board subcommittee formed that will do some interviewing soon and start coming up with a shortlist, so I think in the late third quarter or early fourth quarter we should see something there, he said.