Molybdenum Concentrate Prices Hit Record High Institutional: Molybdenum Tight Balance Pattern Expected To Continue

Molybdenum is a silvery-white metal, hard and tough, with a high melting point and relatively high thermal conductivity, and does not react to oxidation with air at room temperature. Because of its high strength, high melting point, corrosion resistance and wear resistance, molybdenum is widely used in steel, petroleum, chemical, electrical and electronic technology, medicine and agriculture, etc. In addition, molybdenum has broad development prospects in emerging fields and high-tech industries such as nuclear energy, photovoltaics, aerospace, sensors, and military materials.

In recent years, state ministries and commissions have introduced a series of policies and regulations to effectively regulate the order of production and operation of existing molybdenum enterprises in the molybdenum industry, improve the level of comprehensive utilization of resources and energy conservation and environmental protection, promote the structural adjustment and industrial upgrading of the molybdenum industry, promote the sustainable and healthy development of the molybdenum industry, and guide the gradual repair of the supply and demand pattern of the molybdenum industry.

From the distribution of global molybdenum resources reserves, the global distribution of molybdenum resources is more concentrated, mainly in China, the United States, Peru and other places. Among them, China is the world's largest molybdenum resource reserves, accounting for 52% of the reserves in 2021; the United States and Peru reserves accounted for 17% and 14%, respectively.

It is reported that China's molybdenum reserves of 8.3 million tons, reserves ranked first in the world, accounting for more than 50% of the global reserves. According to a research report by East Asia Qianhai Securities, the distribution of molybdenum resources in China is relatively concentrated, with the main production areas being Henan Province and Shaanxi Province. 2021, the total domestic production of molybdenum ore is 219,000 tons, of which 58,000 tons and 49,000 tons are produced in Henan Province and Shaanxi Province, accounting for 26% and 22% of the total domestic production respectively.

Thanks to China's rich molybdenum resource reserves, China has gradually become the world's largest producer and consumer of molybdenum. With the continuous development of the industry's downstream industries in recent years, which has driven the rapid development of China's molybdenum industry, molybdenum production and consumption have also been growing in recent years. According to the data, in 2021, China's molybdenum production reached 100,800 tons, up 13.9% year-on-year; consumption reached 111,400 tons, up 4.7% year-on-year.

IMOA data show that global molybdenum use exceeded production by nearly 6 percent in 2021, consuming 611.2 million pounds of the metal and producing 575.8 million pounds of it. Analysts say consumption in key downstream sectors such as automotive, aerospace and energy is likely to continue to grow through 2031. a potential 30 percent increase in global automotive production between 2021-2031 may lead to increased downstream demand for molybdenum alloys.

Minsheng Securities said molybdenum is mainly used in the steel industry to improve the strength of steel. The concentration of ferromolybdenum supply is high, and once environmental protection efforts are stepped up and a mine is shut down, ferromolybdenum raw materials will be in short supply. The domestic special steel industry is now steadily improving, driving molybdenum consumption to continue to rise. The tight balance pattern is expected to continue against the backdrop of stable supply and rising demand. We can pay attention to Golden Molybdenum, Luoyang Molybdenum, etc.

According to Oriental Securities, a comprehensive analysis of both supply and demand, molybdenum is expected to continue to be in tight balance in 22-23, and molybdenum prices may remain high. On the supply side, overseas mostly copper and molybdenum associated ore, 22 years by the decline in copper ore grade and Chilean drought drag, the main overseas copper and molybdenum mining enterprise production has declined, driving the global molybdenum supply or down 2%. On the demand side, China's molybdenum demand in 2020-2030 compound growth rate or 2%.