As of close March 10, 2023 molybdenum price quotes :


Current Spot Price for Moly has pulled back a little to US$41.05/lb from earlier 17 year highs of US$43.54/lb

https://www.dailymetalprice.com/metalprices.php



Current 1 month moly contract ... US$33.11 / lb
2 - 15 month moly contracts ....... US$33.17 / lb

https://www.lme.com/en/Metals/EV/LME-Molybdenum-Platts#Trading+day+summary


Stuhini' Exploration's Ruby Creek moly deposit contains 477 million lbs of moly in a "pit constrained" measured indicated and inferred resource as reported in the Mineral Resource Estimate completed by Mine Development Associates in early 2022 :

https://static1.squarespace.com/static/5a5e6f708a02c7259a0a2606/t/62674984b45ca03bd1346557/1650936231139/43-101_Ruby_Creek_Resource_v21.pdf.



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4 key factors driving the ‘perfect storm’ in molybdenum markets
 
Featuring
Michael Greenfield    Benjamin Steven
Commodity                  Metals
 
Recent volatility has generated record highs in global molybdenum markets, with both acute and fundamental factors operating to drive prices beyond the expectations of market participants.

Ferromolybdenum prices surged 18% Jan. 30, up $15/kg on the day, a record high since Platts started publishing the price in February 1987 – 36 years ago. The Platts Ferromolybdenum 65% European in-warehouse Rotterdam price moved up to $99/kg-$104/kg Jan. 30, from $85/kg-$88/kg the previous day. Platts is part of S&P Global Commodity Insights.

This is the most recent in a series of price spikes, where the market moved sharply on day-on-day, but molybdenum market participants are uncertain about the factors driving volatility.

European prices did not immediately correct, surging higher to $103/kg-$105.55/kg Jan. 31 and staying above $100/kg until Feb. 6 when it was assessed at $98.5/kg-$99/kg.
 
Molybdenum oxide global vs Ferromolybdenum EU prices 2022-23

The last time European ferromolybdenum prices hit triple figures was May 26, 2005, when it was assessed at $97/kg-$101/kg. The price rise was attributed to a supply contraction due to the closure of mines in Huludao in China following a fatal industrial accident. The supply issue was accentuated by a roasting capacity bottleneck outside of China.

This time, however, there has been no comparable black swan event, with end-consuming industries supporting market fundamentals.
 
 
 
FeMo premium basis oxide and conversion costs 2022-23

Even on generous conversion calculations given rising energy prices and disruptions to supply chains in 2022, recent ferromolybdenum prices have traded at a large premium to their theoretical value to the oxide input, with multiple factors at play to drive prices to record highs.

So how did we get here?
 

Demand volatility

Demand for moly-bearing carbon steel from the offshore drilling sector has stayed strong, as offshore drilling activity has remained high due to elevated oil prices.

In the US, prices for oil country tubular goods have softened only because of seasonality. Winter usually results in reduced drilling rig counts in the Gulf of Mexico, and there is widespread belief in the OCTG market that rig counts may recover quickly in the spring.

However, not everyone is seeing demand positively. Some European stainless steel producer sources said their consumption remains down 30% against pre-COVID 19 levels.

More generally, market participants described how poor demand toward the end of 2022 restricted settlements of long-term contracts with producers, forcing consumers to the spot market in December and the first quarter to cover better-than-expected demand through the new year.

"At the end of last year we were pessimistic due to the energy crisis and the risk of recession," a mining source said. "Many consumer did not commit volumes on yearly contracts and they went to spot. You see people asking for more material, but it is not there. Production-wise, the molybdenum market is struggling."

This was compounded by issues with materials being released from one trader on Jan. 30 – the day of the unprecedented price rise.

A warehousing company restricted the release of this material, meaning customers could not access around 200 mt to 300 mt of their already-purchased units. These customers then flocked to the spot market with deadline-based demand. A correlative 300mt traded on Jan. 30 and captured by the Platts pricing team during the time of this blockage. This was layered on top of an already-tight market.

 
Molybdenum oxide spot market liquidity

Supply deficits

There have been four price spikes of $4/kg or more in a single trading day since October 2022, with the market describing this period of historic high prices as "a perfect storm".
Some observers believe the current market has been years in the making. The major primary molybdenum mines have remained idled since around 2015, contributing to shortages.
 
In addition, no significant secondary molybdenum production from primary copper mining has come online since Las Bambas began producing in early 2016. There are no new mines in any advanced state of planning or permitting, let alone under construction – and the supply deficit is unlikely to get resolved in the near- to medium-term.
 
Disruptions at key mines

Civil unrest in Peru have forced some mines to suspend operations. Peru has been experiencing unrest since the former president Pedro Castillo Terrones was impeached and removed from office in December 2022.

The Las Bambas shutdown followed the suspension of production at Glencore's Antapaccay copper mine in Peru Jan. 20, after protestors damaged vehicles and set fire to a workers' building in the mine's camp.

"We are watching the situation in Peru and the civil unrest, which I believe is might not improve for even the entire year," a molybdenum miner said.

Some sources believe the Las Bambas could have a greater impact than previously seen, because previous protests have enabled the mine to continue operating and stockpile concentrate. This time, the mine has stopped producing. Others are muted about the effect given Las Bambas has witnessed multiple issues in its short operational life.
 
Production issues in Europe

Issues with European production have further squeezed supply chains.

Climax Molybdenum in Rotterdam, a subsidiary of Freeport-McMoRan, had a brief unplanned roaster shutdown in December 2022. The company said this has been resolved.

"The lack of metallurgical feed delayed some deliveries to metallurgical customers. We are rebuilding inventory levels for both metallurgical and chemical production," Freeport-McMoRan spokesperson Linday Hayes said.

Reduced availability in Rotterdam inflated achievable prices for traders, especially given the short covering that has characterized the market in recent months.

"We are offering over the top of the range as we don't have any material. If we have no material, then other market participants will have only one truck," one European trader said.

"We have nothing prompt until mid-February. Our first sales for January deliveries already settled in December and when prices are shooting up, the consumers buy in, so there was a lot of opportunity to sell the first half of February."

The trader alluded to the logistical issues in Rotterdam in recent weeks.
 
"If one trader is under embargo and the market is short five to seven containers, that means the market is shooting up $15 kg on a small number of lots," the source said. "This shows how tight the market is."

This tightness is somewhat self-fulfilling, as traders are more inclined to protect the units they hold.

"Volatility in the recent market means that long traders are also unwilling to let go of units cheap in fear of missing out on any further gains," a trader said. "This leads to very few offers in the market with buyers forced to pay high premiums to secure necessary material."
 
With reports from Elton Lim and Anthony Poole


Source: 

https://www.spglobal.com/commodityinsights/en/market-insights/blogs/metals/021323-ferromolybdenum-price-surge-molybdenum-perfect-storm