Molybdenum Market

Supply and Demand

Molybdenum is produced as a by-product of porphyry copper mining. China is the world’s biggest consumer and producer of the metal, contributing to 38% of the global supply in 2021. Not generally mined on its own, and often overlooked, molybdenum is the latest industrial commodity to catch the attention of investors as prices reach new peaks in February 2023.

Global production of molybdenum is usually around 300,000 t/a primarily destined for the steel industry and is used in engineering steels, superalloys, chemical compounds, and lubricants.

In China, the impact of COVID-19 and power rationing meant that domestic supply for molybdenum declined in 2022, leading to a surge in prices for Asian ferromolybdenum (an alloy formed by combining iron and molybdenum). This added to the huge gains on optimism over a post-Covid recovery in China has led to a huge surge in molybdenum prices. China is also the world’s largest copper consumer.

Chile is another top producer of molybdenum, but ongoing output challenges at Codelco in Chile which produces around 50% of the world’s molybdenum supply, has led to output shortages well below the five-year average. Molybdenum was named by the World Bank as one of the 6 critical metals that will be used in all technologies in the GREEN ENERGY TRANSITION.

Molybdenum prices are currently at 17-year highs (February 2023). Molybdenum prices quoted by the LME jumped 82.9% from US$ 20.72/lb on December 7, 2022, to US$ 37.90/lb on February 6, 2023. Experts say the recent surge in prices is driven by a lack of supply.