Molybdenum Supply Forecasting

The dramatic increase in molybdenum prices from the low of less than $2.50/lb in 1999 to more than $40/lb in 2005 has caught the attention of molybdenum mine owners and exploration project developers. Between 2005 and early 2007, prices pulled back and stabilized within a trading range of $25/lb to $30/lb. This 1,000 percent price increase has motivated most existing producers to expand production and is motivating those with molybdenum prospects to accelerate the development process for earliest possible production. It is still unknown how much new production will come from existing mines, how much production will be needed from new mines if demand continues to grow and how many potential new mines might be available to meet future demand. And of course, the billion dollar question is whether molybdenum prices will remain high, or will they fall back to the low levels seen during the 1980s and 1990s? This article attempts to answer these questions in a way that will help molybdenum project developers and financiers plan for the future.