Market Outlook for Molybdenum    

In the first half of 2009 world molybdenum production was reported to have suffered a year over year drop. China's production has also been affected by the worldwide economic recession.
   Gong Xiaofeng, Jinduicheng Molybdenum Group Co., Ltd.,  disclosed in his report that China produced 89 147 tons of molybdenum mineral concentrates in the first half of 2009, translating to 40 116 tons of pure molybdenum, up 2.87% year on year. The production growth was 23% in 2007, and 40% in 2008. He also reported that the China's consumption of molybdenum in the first half of 2009 increased by 1.72% over one year earlier and fell 11.94% compared with the second half of 2008. Since 2009, China became a net importer of molybdenum products. According to Gong's data, in the first half of 2009, China's molybdenum imports doubled that in the same period of 2008, along with a rocketed inventory. Gong predicted the consumption will recover in 2010.   
   Cutbacks by major producers, combined with stockpiling in China, resulted in a tightening of supply, causing prices to spike in mid 2009, Roskill Information Services Ltd. stated in a report. "Between July 2009 and August 2009, prices for both molybdic oxide and ferromolybdenum almost doubled, only to drop by 50% in the next two months. From November 2009, in line with the general trend in commodity prices, molybdenum prices have increased, reaching US$15/lbMo by January 2010, an increase of almost 50%. Nevertheless, with demand expected to rebound in 2010, prices could consolidate at current levels."
    Roskill estimated that in 2009, global molybdenum consumption declined by 9%, as end-users curtailed their requirements. However the emerging markets such as China have seen demand continue to increase in 2009. Chinese consumption is estimated to have risen by around 5% throughout 2009.  
   Chinese consumption will continue to outstrip growth in the rest of the world, with an annual average rate of 9%py for the next five years, compared to accumulated growth of 2%py in the developed markets of Europe, the USA and Japan, Roskill projected. Stainless steel will be the main engine for consumption growth of molybdenum. The first three quarters of 2009 saw Chinese stainless steel production up by almost 20% year-on-year, while for the whole year China is forecast to produce 8-9 million tons. However, 2010 is expected to see an increase in global demand and production, as world GDP recovers. World production of crude stainless steel is forecast to increase by around 8% in 2010.
  Roskill Information Services Ltd. thought that molybdenum shortages could occur. In response to a large withdrawal of demand from the market, molybdenum producers responded with savage cuts. In 2009, global mined molybdenum output is estimated to have declined by 12%, following annual average growth of 5% for the period 2000 to 2008. Surpluses in 2008 and 2009 have been absorbed by stockpiling, mainly in China.  In the longer term, molybdenum demand is expected to recover and the market may move into deficit by 2014.