Molybdenum: Global Industry, Markets & Outlook
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The supply of primary molybdenum concentrates into the world market is led by China, which accounted for approximately 40% of global production in 2015. Lower molybdenum prices and demand in late 2015 and 2016 have resulted in production cut-backs by major Chinese producers and suspended production at some small-medium scale Chinese producers. China is expected to remain the largest producer of moly concentrates in 2016, with Chile forecast to be the next largest producer.
Other major molybdenum producing nations have also seen production fall as oversupply, falling demand and low prices have impacted producers. Freeport McMoran, the largest single producer in 2015, announced a reduced production target for 2016 and has increased its inventory. Chilean state owned producer CODELCO however is forecast to increase production in 2016, driven by increased output from the Chuquicamata mine in Chile’s Antofagasta region and the Andina mine in Valparaíso region.
New operations which entered production in 2014 and 2015 have had mixed fortunes in 2016. The Sierra Gorda mine in Chile has ramped-up its production to become the second largest molybdenum mine in Chile behind CODELCOs Chuquicamata mine, though the company has faced fines for environmental permit infringements and is reviewing the planned expansion of the operation. The Yichun Luming mine in the Heilongjiang province of China suspended production in November 2015, seventeen months after its first production. Production at the mine was restarted in February 2016, and despite the temporary closure production in 2016 is forecast to remain similar to output in 2015.
The production of steel products remains the largest end-use application of molybdenum products, mainly consumed in the production of stainless and full-alloy steels. The use of molybdenum-bearing steel is strongly linked to the oil and gas industry, as it is used in production and exploratory drilling equipment and in refinery infrastructure. The fall in global oil prices experienced in H2-2015 and early 2016 caused demand for these products to fall, though the resurgence in oil prices throughout the remainder of 2016 has supported a recovery in demand.
Roskill experts will answer your questions…
• How will Chinese producers react to stronger molybdenum pricing?
• Will by-product producers continue to increase their share of global production?
• Will forecast molybdenum prices support primary producers to restart production?
• Which new projects are likely to enter production by 2026?
• What is the outlook for molybdenum usage in steel, metallurgical and chemical applications?