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September 14, 2008

Molybdenum prices expected to rise 10% this year

Producers expect molybdenum prices to stay above USD 30 per pound in 2008 because demand for the metal, which is used to strengthen steel, has strengthened in the face of six month world crude steel production that has increased 5.7% over the first six months of the year.

Mr Kevin Loughrey CEO of Thompson Creek Metals said that "The outlook for molybdenum demand continues to be good. The molybdenum market remains strong (and) prices have been very stable."

Mr Loughrey said that "The occasional customer is taking a bit less this year, citing in particular foundries that sell castings to the automotive industry. Most of our customers are taking toward the top end of what they're entitled to take."
He said that his company's average realized price on molybdenum sales was USD 32.69 per pound in the first half of 2008, up by 21.4% YoY from USD 26.93 per pound in the first half of 2007. Sales prices have remained in excess of USD 30 per pound during 2008 and are expected to remain at approximately these levels for the remainder of the year.

Molybdenum production at the Thompson Creek Mine during the second quarter of 2008 was 4 million pounds, up by 11.1% QoQ from 3.6 million pounds in the first quarter of 2008 and up by 73.9% YoY from 2.3 million pounds in the second quarter of 2007.

Thompson Creek mine in Idaho is on track for full year output of between 16.5 million and 17 million pounds, while its Endako mine in British Columbia is on target to produce between 6.5 million and 7.5 million pounds. However, there is a lag of up to 2.5 months between the time a pound of molybdenum is mined to when it is processed, smelted and sold.