Molybdenum Market Outlook – First Quarter 2010
RBC CM estimates that global molybdenum demand declined by 10.2% in 2009. Dramatic cuts in steel production and stainless steel, in particular, weighed heavily on the demand for molybdenum in 2009. China has been the main driver of molybdenum demand growth over the past five years and this situation is expected to continue throughout the forecast period.
The collapse in molybdenum and copper prices and the global economic crisis resulted in the deferral of a number of previously approved new projects and expansions and the curtailment of existing production. As a result, RBC CM believes supply will be constrained through 2011. The molybdenum price has begun to rally again over the past month as consumer and trader demand has begun to return to the market. RBC CM believes that the deterioration in supply over the past 12 months has set the stage for a dramatic rebound in prices as demand recovers in 2010 and 2011. RBC CM forecasts molybdenum oxide prices of $17.50/lb in 2010, $30.00/lb in 2011, $20.00/lb in 2012, and $12.50/lb in 2013. The long term forecast is $11.00/lb in 2009 US$ terms.

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