Key Takeaways From The IMOA's Annual General Meeting

Key Takeaways from the IMOA's Annual General Meeting

At the International Molybdenum Association's (IMOA) annual general meeting, held last month in Salt Lake City, Utah, a number of experts analyzed the moly market and presented their outlook for the metal moving forward.a

Here's a look at the key takeaways from presentations by Markus Moll, managing director at SMR Steel & Markets Research, and Catherine Virga, director of research at CPM Group.

Demand drivers

Moll spent much of his presentation discussing where future demand for molybdenum is likely to come from, stating that the oil and gas industry is currently the most important source of usage, accounting for 20 percent, as per Metal-Pages. "It was always your good friend. Now it's your best friend," the publication quotes Moll as saying.

Specifically, he said that gas exploration, particularly deepwater projects, is "seeing increasingly stringent equipment specifications," and those are leading to increased demand for molybdenum. He also mentioned the automotive sector and mechanical engineering industry as other larger sources of demand for the metal.

For her part, Virga said that emerging markets "will remain the dominant drivers of growth," while technological innovation — for instance, from computer manufacturers — should account for "the next big wave of consumer demand." She sees demand for moly growing by 2 percent this year, to 570 million pounds.

Potential concerns

Virga explained in her presentation that one thing that may hamper the moly market is rising interest rates, "especially in the United States where the Federal Reserve may start to taper off its economic stimulus programme or employ other tools to mop up excess liquidity."

Across the globe, there is some anxiety that "a crackdown on shadow financing" could direct high-risk debt to China's formal lenders, "leading to knock-on effects for the construction and associated sectors," Metal-Pages quoted Virga as saying.