CPM says global molybdenum supply deficits will grow in 2009 and 2010
In its latest molybdenum market study, CPM says tight credit market s and other developments have caused molybdenum’s forward supply curve to shift over the past year.
Posted: Thursday , 10 Jul 2008
RENO, NV -
Commodities research firm CPM Group says financing for molybdenum mining projects "has become an uphill battle for some of the new primary and by-product producers."
Meanwhile, the delays in bring new primary moly or copper/moly mining projects on line have exacerbated the moly supply deficits forecast for 2009 and 2010, according to CPM's study, The Sustainability of Recent Molybdenum Prices, 2008.
The report asserts that supply deficits are expected to be larger over the next two years, followed by slightly larger surpluses from 2011 through 2014.
Meanwhile, CPM says the price outlook for molybdenum going forward "has become moderately more bullish than previously projected. The upward revision in the expected prices for molybdenum is partially supported by climbing capital expenditures, the sharp increase in diesel prices, higher electricity prices in China, and loftier freight charges."
"These higher production costs-combined with robust demand in the energy industry, narrow inventory levels, and expectations that molybdenum supplies will not exceed demand on a sustained basis are expected to boost the floor prices of molybdenum," according to a news release issued by CPM Wednesday.
"The deeper deficit in 2008 and 2010 should help underpin molybdenum prices at higher levels over that period. However, prices are expected to decline in 2011 as the market transitions back into a surplus," the news release said. "Demand for molybdenum, during the recovery in global economic growth, may be amplified by molybdenum's price correction. "
In the release, CPM noted that moly demand has increased at a "robust rate" over the past five years.
"Demand is not only growing in the principal end uses of molybdenum, but in newer industries that are seeking to utilize molybdenum's significant alloying properties," according to CPM.
Although Mineweb requested a copy of the full study, CPM is not distributing the report to members of the news media due to proprietary and confidentiality reasons. For further information about purchasing a copy of the report, go to www.cpmgroup.com