Steel Market Malaise Causing Big Problems for Moly Price

The Wall Street Journal reported that contrary to popular opinion, molybdenum is “[t]he biggest casualty of the malaise affecting global steel markets.”
According to the news outlet, three-month moly futures on the London Metal Exchange are down 35 percent so far in 2015 — that’s a more extreme price decline than those seen in the coal and iron ore markets.
As quoted in the market news:

The price for three-month molybdenum futures on the London Metal Exchange has plummeted 35% this year, to US$13,250 a metric ton. That is outpacing falls in iron ore and coking coal, which are down 22% and 26%, respectively and has made molybdenum the worst-performing metal this year.
A year ago, molybdenum was trading for about US$30,000 a ton.
Producers are now facing up to a challenge similar to one that has buffeted miners of other steelmaking ingredients: a deepening glut. Countries including the U.S., Chile and China have increased production of the raw material in recent years as miners sought to satisfy previously rocketing commodity demand in Asia.

Explaining the situation, David Merriman, an analyst at Roskill Information Services, commented:

It is similar to iron ore in the fact that the problem is with too much supply. Unlike iron ore, though, the major molybdenum producers are primarily copper producers, [which means] molybdenum production is not dependent upon demand and price.

Click here to read the full article from The Wall Street Journal.