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Molybdenum Had a Strong Quarter – Supply and Demand Grew

Molybdenum Had a Strong Quarter – Supply and Demand Grew

IMOA, the International Molybdenum Association, released Q1 2018 supply and demand figures on 23rd of August 2018:

  • Supply was 137.5 Mlb Mo, up 6% vs. Q1 2017
  • Demand was 141.5 Mlb Mo, up 5% vs. Q1 2017

Both molybdenum demand and supply grew. Demand growth slightly outpaced supply growth in Q1 2018. In 2017, it was the other way around. Supply of 568.2 Mlb Mo was higher than demand of 558 Mlb Mo according to IMOA.

For those, who are not experts of the molybdenum supply chain, a short primer follows. The production process of molybdenum products involves several steps. First, a molybdenite concentrate (MoS2) is produced by putting the molybdenum containing ores through a milling and flotation process. Then the molybdenite concentrate gets roasted at 600-700 °C in multihearth furnaces. The result is a molybdenum oxide powder, also called “Technical Mo Oxide” (MoO3). The molybdenum oxide powder can either be used directly by stainless steel mills or it can be briquetted to form molybdenum oxide briquettes. Foundries prefer to use ferromolybdenum (FeMo). To produce FeMo, the moly oxide is mixed with iron oxide and reduced by aluminium in a thermite reaction.

Geographically, production of molybdenum is very concentrated. The world production shares in Q1 2018 were:

  • 35% Chile
  • 34% China
  • 24% North America
  • 7% Rest of World

Production growth was particularly strong in Chile where supply grew 11% in Q1 2018 (vs. Q1 2017). Major producers in Chile are Molymet and Codelco, major producers in China are JDC and China Molybdenum Co.

On the demand side, the world molybdenum consumption shares in Q1 2018 by geography were:

  • 34% China
  • 26% Europe
  • 10% USA
  • 10% Japan
  • 19% Rest of World

The strongest YoY growth in Q1 2018 was recorded by Japan (+15%) and the USA (+7%). But also in China and Europe demand grew vs. Q1 2017 by +4% and +2% respectively. Molybdenum is used as an alloying metal to steel and cast iron to improve corrosion resistance, strength and weldabilty. The largest user of molybdenum are stainless steel producers, for example Outokumpu, Aperam, Tsingshan and TISCO.

Source: www.imoa.info

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