Molybdenum Prices Explained

Molybdenum prices posted varying trends across regional markets as supply and demand dynamics continuously fluctuate.

The North American market reported mixed sentiments as the molybdenum spot market showed a 1.3% price increase due to logistical problems that translated to freight hikes. However, the volatile automotive and construction sectors in the region contributed to varied trends in the market.

The Asia Pacific region shared a similar market scenario with the NA. While consistent demand from stainless-steel mills drives Ferro molybdenum spot prices, India and Thailand struggled with low-capacity utilization and rising inventory levels. This made local traders cautious of their investments.

High interest rates and elevated energy costs fueled the volatile European molybdenum market. This resulted in increased commodity prices as stainless steel mills in the region faced difficulty in acquiring molybdenum due to increased port congestion in major European ports.

Why are molybdenum prices fluctuating?

1. Demand Volatility

Steel manufacturing accounts for 55% of molybdenum use. Thus, the growth of the steel and construction industry has a direct impact on molybdenum prices. Additionally, the increasing demand for moly-bearing carbon steel from the offshore drilling sector due to elevated oil prices puts its demand at a growing curb.

Furthermore, molybdenum’s tolerance in extreme temperatures makes it a popular metal in various and important aerospace production. Overall, the growing demand from these top industries coupled with other applications greatly impacts molybdenum prices.

2. Chinese Supply and Demand

According to Statista’s metal production records, China produced 100,000 molybdenum metric tons. While the country is the number one producer of this rare metal, it also tops as one of the major consumers of molybdenum.

China uses more than 30% of this metal’s annual global. This is due to the country’s extensive railway and housing projects. Thus, the country’s huge consumption of metal influences molybdenum’s global supply and prices.

3. Supply Disruptions

Chile (the second largest molybdenum producer) and Peru (the fourth largest producer), constantly battle mining protests from its workers. Chile’s Codelco, the world’s largest copper producer, reported its mining crisis as its workers’ demonstration blocked access to mines.

Additionally, Peru’s mining exports dropped to 19.8% due to the country’s state of emergency. Thus, the public crisis in these molybdenum mining hubs affects its global supply and contributes to an increase in its prices.

4. Industrial Outlook

Molybdenum prices largely depend on the growth of economic activity, particularly in the industrial sector. The engineering steel is the largest consumer of molybdenum.

Thus, economic growth from developing countries fuels the demand for this metal as bridges, railways, and airports require strong steel for these big applications. Additionally, the emerging green steel application by APAC (Asia-Pacific), particularly Canada, Japan, and South Korea, is another molybdenum price mover.

Which variables impact the price of molybdenum?

• Demand Volatility
• Chinese Supply and Demand
• Supply Disruptions
• Industrial Outlook
• Input Prices
• Global Stocks
• Seasonality

Where does molybdenum come from?

Molybdenum is a relatively rare metal, with a global production of around 250,000 tons per year. The main producers of molybdenum are China, Chile, the United States, Peru, and Mexico.

Originally, scientists believed that molybdenum was graphite or lead ore. This claim became clear in 1778 when Swedish chemist, Carl Wilhelm Scheele, analyzed the ore and proved it was neither of these substances. Further experiments from Peter Jacob Hjelm, Scheele’s colleague, debunked the previous claims. Therefore, discovering the new element, molybdenum.

Here is the commodity’s production and processing methods.

1. Primary – The most common type of molybdenum production accounts for around 80% of global molybdenum production. It primarily involves the mining and processing of molybdenum ores. 

2. Secondary – This second production involves the recovery of molybdenum from scrap materials such as used steel alloys and spent catalysts. This is a less common type of molybdenum production but becomes increasingly important as the world strives to reduce its reliance on natural resources. According to the United States Geological Survey (USGS), this practice contributes 30% of the total supply. 

1. Milling – This process involves crushing and grinding the ores into very fine powder using ball or rod mills.

2. Flotation – This method is about the separation of molybdenum from other rock particles. The fine powder is mixed with water and aerated in flotation tanks. The less dense molybdenite ore floats to the top while the dense rock sinks to the bottom.  Further treatment is done to filter the metal from other particles such as copper and lead.

3. Roasting  – This process includes roasting molybdenum disulfide at a temperature of between 900 and 1200 degrees Fahrenheit to convert the molybdenum to molybdenum oxide.

4. Reduction – The molybdenum oxide is then reduced to molybdenum metal using hydrogen gas.

What are the uses of molybdenum?

1. Alloys – Steel production needs 55% of molybdenum use. The metal’s high melting point improves the strength of steel at high temperatures and allows it to withstand pressures of up to 300,000 pounds per square inch. Additionally, its corrosion resistance property makes it an important material for making stainless steel.

2. Catalysts – About 14% of molybdenum is used in the chemical industry for catalysts and lubricants. Petroleum refineries use it to help remove sulfur from natural gas and refined petroleum products. The process, known as hydrodesulfurization, involves heat and pressure plus a molybdenum oxide catalyst with an alumina support and cobalt.

Furthermore, molybdenum also acts as a catalyst in polymer and plastic production.

3. Lubricants – When combined with sulfur, it forms molybdenum disulfide which helps lubricate two-stroke engines, bicycle coaster brakes, bullets, and ski waxes.

4. Fertilizer – Molybdenum also plays an important part in our food production as it’s a major component in making fertilizer. Legumes such as soybeans and alfalfa need molybdenum fertilizers for their nitrogen fixation.

What is the future price of molybdenum?

From the supply and demand factors, molybdenum is flying in tailwinds. Thus, market analysts predicted a bullish $80.93 molybdenum per kilogram in 2030. Several present and future factors contribute to its marketability:

• The growing demand from the steel industry. The metal’s top price determiner.
• Increased use of renewable energy. As the world transitions to cleaner energy sources, the demand for this metal grows as well.
• Limited supply. Apart from its rare characteristics, this metal is non-renewable. Additionally, the growing tension of its main resources which creates a gap in the supply chain makes this metal even more sought-after in the coming years.