Molybdenum supply rose by 14% in 2017, recovering from two consecutive years of decline. Output from primary mines increased by 20% y-on-y, which although impressive, follows two successive years of sharp declines. Primary producers accounted for 30% of global primary output in 2017, the lowest ratio compared to molybdenum supply from by-production this decade with the exception of 2016.
The rise in primary output in 2017 was mainly the result of higher production in China, where some large primary mines, such as JDC Moly, increased output in response to rising demand, while primary output also climbed in the USA.
Output from by-product mines continued to rise – the fourth successive year of production growth. In 2017, primary mines accounted for 70% of global output. This rise was driven by higher output from copper-molybdenum in South America, and Chile in particular, despite weaker production at the giant Chuquicamata mine. The Sierra Gorda mine, which was commissioned in 2014, increased output further, becoming the largest by-product moly producer in the process.
China remained the largest producer of molybdenum concentrates in 2017, accounting for 35% of all production in 2017, followed by Chile, which accounted for 24% of global output. Other major producers include the USA and Peru and, combined with China and Chile, these four countries accounted for 85% of world output in 2017.
The majority of molybdenum is consumed in the production of steel products, such as stainless steels, alloy steels, engineering steels and tool steels. Part of this consumption is linked to Oil & Gas sector activity, where molybdenum-bearing steels are used in drilling equipment and in oil refineries. The recovery in oil prices in 2017 from its low point in the previous year has helped push up consumption of molybdenum in steel applications.