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Molybdenum tags to bounce back

Keywords: Tags  KGHM International, molybdenum prices, Kevin Pritchett, Sierra Gorda copper-molybdenum mine, Daniel Fitzgerald

NEW YORK — Analysts are forecasting molybdenum prices to trend up in 2014, while user demand has already begun to improve, KGHM International Ltd head of molybdenum sales and marketing Kevin Pritchett said.

Molybdenum prices are currently tracking below not only the five-year average but also the 20- and 100-year averages when adjusted for inflation, Pritchett told delegates at AMM’s 27th Annual Stainless and its Alloys Conference in Chicago.

Pritchett presented forecasts from CIBC which estimated molybdenum prices to average $12.25 per pound in 2014, rising to $12.52 per pound in 2015.

Molybdic oxide is currently trading in a range of $9.40 to $9.60 per pound, according to AMM’s most recent assessment.

Pritchett said that molybdenum demand has improved in the third quarter, and he predicted the trend would continue with the recovery in such sectors as automotive.

"Earlier in the year you had companies keeping lean inventories and in the summer we had producers selling into the downturn of the moly price, getting a little panicky. Now it seems a little overdone. We have a perception that the moly market is kinda short right now," he said. "We should see some strengthening of the moly price once demand gets to a normal level."

KGHM has a 55-percent stake in the Sierra Gorda copper-molybdenum mine in Chile, which is expected to produce about 50 million pounds of molybdenum per year in its first five years of operation, Pritchett said.

Editor’s note: Due to a reporting error, the original version of this article incorrectly stated that KGHM International Ltd. expected molybdenum prices to begin to trend upward amid improved user demand in 2014. KGHM doesn’t forecast prices. The price forecasts referenced by Kevin Pritchett, head of molybdenum sales and marketing, were made by CIBC and not endorsed by KGHM. The projected molybdenum production volume from the Sierra Gorda copper-molybdenum mine in Chile, which was misstated in the same article, is 50 million pounds over the first five years of production.

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