Molybdenum price average of $11 seen for 2009

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Molybdenum price average of $11 seen for 2009

New molybdenum price forecasts from producers are looking for $11/lb average price for 2009, down from $29 in 2008, but up from the first-half average of $9.

Previous molybdenum price forecasts from investment bank Dahlman Rose & Co. had a $10/lb annual average price in 2009 while J.P. Morgan Securities boosted its forecast to $15.
But Chilean producer Molibdenos y Metales (Molymet) suggests moly prices will rise enough above the $9 first-half average to get to $11 for the year. U.S. miner General Moly agrees that any demand growth will boost prices.

Still, the short-term outlook is somewhat muted since many European, North American and South American steel mills running far below full capacity and Western world demand for molybdenum is down some 30% from last year. Also, the second-half pickup in Western steelmaking is expected to be slow and come just as Chinese producers reduce steelmaking because of subdued local and export demand.

Molymet CEO John Graell is discussing the near-term outlook–telling that “very probably, the price in the second half of the year will be higher than the first half ….If the world begins to recover slowly, everything is going to pick up.” But, General Moly CEO Bruce Hansen is more interested in the long-term outlook. He tells the New York Society of Securities Analysts that any demand growth rebound in the face of limited new supply will generate a 2011-2012 average of $14/lb.

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