After 14 Years, The Price Of Molybdenum Reached A New High Molybdenum Concentrate Prices Hit A 14 Year High!

On October 11, the price of 45% molybdenum concentrate in Henan was 3010 yuan/ton, which means that the price of molybdenum increased to 3000 yuan/ton after 14 years.

Historical data shows that under the influence of the economic crisis in 2008, the molybdenum price dropped rapidly from a high of about 4000 yuan/ton, and showed a trend of shock decline from 2008 to 2015. Since 2016, under the tight balance between supply and demand, the molybdenum price rebounded from the bottom, and the shock became stronger.

Since August of this year, stimulated by the continuous strong demand for ferromolybdenum in steel plant bidding, the molybdenum price has been rising all the way with a firm trend.

Supply and demand gap

According to USGS data, in 2021, the global molybdenum reserves will be 16 million tons, while China's reserves will be 8.3 million tons, accounting for more than 51%, making it the world's richest country in molybdenum resources; The United States and Peru rank second and third respectively, with 2.7 million tons and 2.3 million tons of molybdenum reserves. CR3 resource reserves account for 83% of global reserves.

According to the data released by the International Molybdenum Association (IMOA), the global molybdenum output will be 261200 tons in 2021, a decrease of 4% from 273200 tons in 2020. In 2021, the global molybdenum consumption will be 277200 tons, an increase of 13% over 244800 tons the previous year. The supply gap will be 16000 tons, accounting for 5.8%.

Molybdenum is widely used as an additive in the production of low alloy steel, alloy steel, stainless steel, tool steel, cast iron, super alloy, molybdenum base alloy, etc. According to IMOA statistics, the global molybdenum consumption structure in 2020 will be 39% alloy steel, 24% special stainless steel, 7% alloy tool steel, 8% cast iron/steel, 3% nickel alloy, 6% molybdenum metal and 13% chemical industry.

China is the largest molybdenum producer, increasing from 88450 tons in 2020 to 100833 tons in 2021, a year-on-year increase of 14%. It is the only area where the output will increase in 2021. In 2020, the output will decline due to the leakage of Luming Tailings Pond in Yichun and the rainstorm in Shaanxi. South America is the second largest molybdenum production area, with an output of 82236 tons, 9% lower than the previous year's 90219 tons; The output in North America is 58332 tons, 16% less than 69717 tons in 2020; The output of other countries and regions declined the most, from 24857 tons in 2020 to 19822 tons.

In recent years, the state has formulated a series of industrial policies to support the development of the medium and high-end alloy steel industry, and clarified the important position of special steel products with high technology content and used for high-end manufacturing. As a "strategic rare small metal", molybdenum has a strong demand in both the traditional steel field and the new energy field.

On the one hand, China is vigorously promoting the recovery of traditional infrastructure, real estate and water conservancy, so the domestic demand for steel is clear, so the demand for molybdenum will also grow steadily; On the other hand, molybdenum also plays an important role in the field of new energy. For example, in the photovoltaic field, molybdenum is one of the metal materials for the back electrode of the thin film plate; Another example is wind power generation. The use of thin molybdenum alloy steel shell and support frame can reduce the weight by 20-40%.

The rapid development of new energy industry will further promote the growth of molybdenum demand. In the case of limited supply, it is expected that the gap between supply and demand will further exist.

Head is king

China's molybdenum ore industry is capital intensive, resource dependent and downstream driven, with high barriers to entry.

At present, China's molybdenum mining enterprises all have mature downstream sales channels. In addition, due to the strong demand in the downstream market, there is little competition pressure among enterprises in the same industry. According to the annual output, it can be divided into large, medium and small enterprises. Among them, large enterprises with an annual output of more than 30000 tons, medium enterprises with an annual output of 1-3 million tons, and small enterprises with an annual output of less than 10000 tons.

Jinmo Co., Ltd. is a professional molybdenum supplier with strong influence in the global molybdenum industry. It is the executive director unit of the International Molybdenum Association and the president unit of the Molybdenum Branch of China Nonferrous Metals Industry Association. It was awarded the title of "China's Molybdenum City" by the China Mining Federation.

The company has a molybdenum mining, mineral processing, smelting, chemical industry, metal processing, scientific research, trade integration industry chain. It mainly produces more than 20 kinds of high-quality molybdenum products in three series of molybdenum metallurgy furnace charge, chemical industry and metal processing, which are widely used in iron and steel smelting, petrochemical industry, aerospace, national defense and military industry, electronic lighting, biomedicine and other fields.

Jinduicheng Molybdenum Co., Ltd. has two major mining areas, Jinduicheng Molybdenum Mine and Ruyang Donggou Molybdenum Mine. Jinduicheng Molybdenum Mine is one of the world-class super large molybdenum deposits with a simple shape, balanced and stable changes in occurrence and grade. The amount of ore resources is about 4.8 billion tons, and the reserves are about 3.4 billion tons. Ruyang Donggou Molybdenum Mine has a metal reserve of 280 million tons, and the ore is of good natural quality. It is characterized by high grade, low impurity content, easy deep processing, and suitable for large-scale open-pit mining.

In 2021, the company's molybdenum business will account for more than 84%, and its molybdenum charge revenue will account for 56%, an increase of 18.1 pct year-on-year; Molybdenum revenue accounted for 16%, up 5.5 pct year on year; The revenue of electrolytic copper accounted for 7%, down 23.7 pct year on year. Through the adjustment of business structure and cost reduction and efficiency enhancement measures, the gross profit margin of the Company has increased from 7.66% in 2017 to 21.95% in 2021.

Luoyang Molybdenum Industry is mainly engaged in mining, processing and mineral trade of basic metals and rare metals, such as mining, dressing and smelting. At present, the company's main business is distributed in Asia, Africa, South America, Oceania and Europe. It is the world's leading producer of tungsten, cobalt, niobium and molybdenum, an important copper producer, and a leading phosphate fertilizer producer in Brazil. At the same time, the company's basic metal trade business ranks among the top three in the world.

Since the A-share listing in 2012, Luoyang Molybdenum Industry has accelerated its globalization and diversification strategy, and continued to lay out multi metal products. In 2013, it acquired Australian NPM copper gold mine, in 2016, it acquired Congo (DRC) TFM copper cobalt mine and Brazilian niobium phosphorus assets, in 2019, it acquired IXM, the world's third largest metal trading company, and in 2020, it acquired Kisanfu copper cobalt mine again to further strengthen the layout of copper and cobalt resources. At present, the company has rich tungsten and molybdenum resources. It is one of the top seven molybdenum producers and the largest scheelite producer in the world. It is engaged in the mining, smelting, deep processing and scientific research of molybdenum, tungsten and iron metals. It has integrated upstream and downstream businesses such as molybdenum and tungsten mining, mineral processing, smelting and chemical industry. Its main products include ferromolybdenum, ammonium paratungstate, tungsten concentrate and other molybdenum and tungsten related products. At the same time, it will recover iron, copper, fluorite, rhenium and other by-products. In 2021, The output of molybdenum metal is 16385 tons.

In a word, with the increase of demand and the tightening of supply, the prosperity of molybdenum is expected to keep rising for a long time in the future. Enterprises holding resources in the upstream deserve attention.