Moly Article Last Friday - June 29To all:
The National Post carried this article (See Below+++):
Some salient points -
1) Apparently, China is expected to CUT Molydenum EXPORT quotas thereby tightening worldwide supply even more. News on this is expected this week or so.
2) FWIW, the Moly analyst at Blackmont is forecasting $50/lb for 2008 but price will then decline to $10/lb by 2012.
3) For those operations where Moly is a by-product but not currently captured in the mining process, it takes about TWO years to build a moly extraction plant.
4) Certain funds buying moly for the expected price appreciation aspects could tighten the moly market even more.
All in all, things are looking very bright for the moly plays.
All the be$t,
LB
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MOLY NEARING TWO YEAR HIGH
'Moly' nearing two-year high
Jonathan Ratner, Financial Post
Published: Friday, June 29, 2007
The mysterious metal that is molybdenum, or "moly" for short, could rise above record prices last seen in June, 2005, if reports that China may cut export quotas on moly products by roughly 50% prove correct. News is expected next week.
Moly, primarily a by-product from copper mining, but also mined on its own, has risen from less than US$5 per pound in early 2003 to around US$35 these days.
Blackmont Capital analyst George Topping thinks average prices will reach US$50 per pound in 2008 due to tight demand that he says is only exacerbated by investment funds. He thinks prices will continue to fall after that, eventually averaging US$10 in 2012 and beyond.
While there appears to be a lack of public information available about element number 42 on the periodic table (symbol Mo), which is typically used to strengthen iron and steel, "most of the easily attainable moly production from existing operations has already been accessed and in some cases is now declining," Mr. Topping said in a research note. Meanwhile, he said it takes roughly two years to add a moly plant to existing copper projects that are not equipped to capture the moly they mine.
This is one symptom of what he calls a "lack of faith" in the moly rally and a market characterized by indifference.
Nonetheless, Mr. Topping expects demand to remain strong in coming years due to demand and the limited number of advanced deposits.
Sprott Asset Management's new molybdenum participation fund, which will buy and sell physical moly much like its does with its uranium fund, will also likely tighten the market suddenly, he said, adding that this could catch the market off guard.