Ferromolybdenum, which is mainly used in steelmaking, traded for $12.65 to $13 a pound this week, down from $12.75 to $13.50 a month ago, according to data from Metal-Pages.
Molybdenum oxide (from which ferromolybdenum is made) is now trading for $11.45 to a pound, compared to $11.80 a month ago, according to Bloomberg data.
Lower prices prompted JPMorgan Chase & Co. (NYSE:JPM) to cut its full-year price target on shares of major moly producer Thompson Creek Metals Company (NYSE:TC) this week after the company reported disappointing earnings. It recently laid off workers at its Thompson Creek mine in Idaho, and Morgan sees the possibility that the operation could be closed, at least temporarily.
“We are lowering our Dec 2013 price target to $5.00 from $6.00 to reflect our lower moly price forecasts, our assumption that the Thompson Creek mine goes on temporary care and maintenance from 2015-2016 and restarts in 2017,” wrote Morgan analysts in a note quoted by Jags Report.
Meanwhile, Metal-Pages reported that US steel production was down slightly last week and stood at 12.64 million net short tons as of February 16, off 7.1 percent from the same period a year ago. However, Metal-Pages also said that ferromolybdenum prices moved up in China on February 22 ahead of an anticipated increase in buying after stainless steel mills used up the inventory they bought before Chinese New Year.