Moly Outlook 2015: First Half Of Year May Bring Price Bump
2014 was a quiet year for the moly space, though December brought two interesting pieces of news. Looking to the future, those hoping to see a stronger moly market in 2015 may end up getting that wish in the short term, but perhaps not in the long term.
A quiet year in the molybdenum space was turned upside down in December as two big pieces of news hit the market. The first was Thompson Creek Metals Company's (TSX: TCM,NYSE:TC) announcement that at the end of 2014 it will suspend operations at Endako, a moly mine it has a 75-percent interest in. The company has long been saying that its Thompson Creek moly mine will go on care and maintenance at that time, but the news about Endako surprised market participants given Thompson Creek's previous optimism about improving profitability at the operation. The second piece of news came courtesy of China, which according to Platts appears to have pushed back the cancelation of its moly export tax. Originally expected to be canceled on January 1, 2015, the date is now rumored to have been moved to May 1, 2015. Both reports help provide a picture of the moly market in 2014, with the first highlighting the price situation. Thompson Creek cited "prolonged volatility in the molybdenum market" as its reason for suspending Endako, and indeed the moly price hasn't had a great time this past year. Though 2014 got off to a promising start, with moly oxide prices hitting a 21-month high of $13 per pound back in April, since then the situation has soured — last week, the Platts daily dealer moly oxide assessment came in at $8.95 to $9.15 per pound, and earlier in the month it was down at $8.95 to $9.05. Meanwhile, China's plan to delay the removal of its moly export tax is a reminder of a key moly market event that took place in the first half of the year: the World Trade Organization's (WTO) ruling that Chinese export restrictions on moly, rare earths and tungsten are not consistent with its obligations as a WTO member. While at the time the news had little impact on the moly market, some said that once the tax was actually removed there could be some reaction — now it looks like any impact will be delayed further.