Prophecy FulfilledFrom my post dated May 13: “Naturally, ML is a strong candidate to become a newly selected component to this prestigious Index” As a further comment, I don’t think it is correct to imply that ML’s advance this past week was attributable to ML’s selection to the S&P/TSX Global Mining Index. Standard & Poors is legendary for its discretion. They would jeopardize their good name by “leaking” this news to anyone. Actually, ML’s strength this week was attributable to the publicity* (see excerpts below) of the enormous demand for molybdenum in upcoming years. Most of the other MLY stocks responded sympathetically, but ML, with its superior growth characteristics and its relative unrecognized value, simply held on to these gains better than its contemporaries. The industry-specific news that had caused an upward valuation to the molybdenum market came on Tuesday, June 5, and the chart below shows that the entire group benefited. But it was ML, as the superior member of this group, that was best able to retain it gains.
/ichart.finance.yahoo.com/z?s=ML.TO&t=5d&q=l&l=on&z=m&c=TCM.TO,MOL.TO,MLY.TO,GMO&a=v&p=s> Excerpts: * “This week, Janikowski meets with General Electric (GE) to discuss plans for reactor condenser tubing for nuclear power plants to be constructed for Entergy (ETR) and Dominion (D). Recently, his company won the contractor to supply tubing to China’s Qinshan #2 reactor. He estimated condenser tubing for new power plants can range between 35,000 and 41,000 pounds of molybdenum. “Our research shows there could be more than 1,000 power plants constructed around the world over the next decade. This quantity of molybdenum consumption alone would represent about one year’s of current mining production. China is reportedly constructing between one and two power plants per week.” “If 100 desalination plants require 23 million pounds of molybdenum in the Middle East, and if 1000 power plants in China/India/US/Middle East require 350 million pounds of molybdenum over the next decade or longer, then where will sufficiently mined molybdenum come from? If this doesn’t shock, then consider that more than 3,000 cars are daily rolling off China’s assembly lines – which collectively consumes about 2700 pounds of molybdenum per day. “There is presently a growing panic among molybdenum traders. From our sources, it appears reduced inventories have been overpowered by rushing demand for the silvery-white ‘energy metal.’ “On the day before the Ryan’s Notes metals conference at the New York Athletic Club on Tuesday, our sources told us moly traders are sweating, scrambling to find inventory. One told us, “$50 per pound molybdenum is a heartbeat away.” This would represent an increase of nearly 50 percent from present pricing. “How did this tightly controlled, somewhat secretive and closed market get out of control? Full article:
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