Molybdenum Market

Supply and Demand

Molybdenum is primarily produced as a by-product of porphyry copper mining. China remains the world’s largest consumer and producer of molybdenum, accounting for approximately 38% of global supply in recent years. Though not typically mined as a primary product, molybdenum has recently attracted investor attention due to its rising prices.

Global production of molybdenum is generally around 300,000 tonnes per annum, with the majority used in the steel industry, including engineering steels, superalloys, chemical compounds, and lubricants.

In China, disruptions caused by COVID-19 and power rationing led to a decline in domestic molybdenum supply in 2022. This shortfall, coupled with strong recovery prospects in the post-COVID era, contributed to a significant increase in molybdenum prices. China remains the largest global consumer of copper, which further affects molybdenum market dynamics.

Chile is another major producer of molybdenum, contributing around 50% of global supply. However, ongoing production challenges at Codelco, a key Chilean producer, have resulted in output well below the five-year average. The World Bank has identified molybdenum as one of the critical metals essential for technologies in the green energy transition.

As of mid-2024, molybdenum prices are at elevated levels, reaching 17-year highs. Prices on the London Metal Exchange (LME) surged from approximately USD 20.72/lb in December 2022 to around USD 37.90/lb by February 2023. This sharp increase is largely attributed to supply constraints and strong demand.