Why The Upside For Molybdenum Prices Is Limited For The Rest Of The Year

-13.22%
Downside
47.02
Market
40.81
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Molybdenum prices have rallied over 20% in recent weeks, after a weak start to the year, as indicated by the decline in Freeport-McMoRan’s realized prices for molybdenum sales in Q1. However, the upside for molybdenum prices is likely to be limited for the rest of the year. Molybdenum is primarily used as an input in the production of various kinds of steels. As per the latest World Steel Association estimates, global steel demand will contract in 2016, driven by a contraction in demand in China, the world’s largest steel consumer. With demand conditions for steel, and consequently for molybdenum, expected to remain subdued for the rest of the year, a significant growth in prices is unlikely for the rest of the year.

Why The Upside For Molybdenum Prices Is Limited For The Rest Of The Year

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Freeport-McMoRan

 

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