(For other news from the Reuters Global Mining and Steel
Summit, click here)
* Pent-up demand for molybdenum should hasten 2010 growth
* Modest growth seen in all geographic, industry areas
* Demand gain has lifted price to $18/lb from $12 recently
By Carole Vaporean
NEW YORK, March 8 Thompson Creek Metals Co Inc
(TCM.TO)(TC.N) looks for pent-up demand or the "rebound effect"
to cause global demand for molybdenum to grow faster in 2010
than the usual 4 to 5 percent pace.
Speaking to Reuters Mining and Steel Summit on Monday,
Chief Executive Kevin Loughrey said, the molybdenum market "has
been growing at a 4 to 5 percent rate historically, and it
could grow faster than that this year, because there is some
Though actual numbers are hard to come by for the global
molybdenum market, Thompson Creek estimates 2009 demand
declined to about 420 million pounds.
"It's a little easier to get that growth if demand comes
back. A rough estimate would be a 450 million lb market, but no
one really knows," he said.
Citing a steady, though modest, pick-up in demand from all
areas, both geographic and industry sector, the CEO added that
the molybdenum price had surged to $18 per lb as of last
Friday, compared with $12 a lb in recent weeks.
"The trend line seems to be gently upward, albeit with
significant ups and downs. But the overall (price) trend is
escalating upwards. And we think that is consistent with supply
and demand fundamentals," said Loughrey.
The price for molybdenum, used primarily in steel for its
hardening properties in oil pipeline and drilling and as an
anti-corrosive in specialty steels, fell from a high of around
$35 a lb during the metals boom to a low in 2009 of around $9.
"Because we're in the spot market every day, we do have a
good feel for what the price ought to be," said Loughrey.
He said the latest price increase was coming from increased
demand amid a lack of ready material.
"Over the past several weeks, as demand is growing, not
hugely, but on a regular basis, there is not a lot of moly to
answer to that demand. That's caused the price to move up
fairly substantially in the last few weeks."
Asked about Thompson Creek's orders, Loughrey said the
company was sold out with no material currently on hand.
"We're pretty much sold out. Not as much as 6 months out,
but we would have a hard time filling an order today."
The CEO said Denver-based Thompson Creek, whose stock
trades both on the New York and Toronto stock exchanges,
remains optimistic about the balance of 2010, adding that
improvement in 2011 could be even greater, coming from all
geographic regions and industry sectors.
"Whether we're selling to a North American or European or
Indian customer it's overall, worldwide supply/demand that is
driving the market," the CEO said.
But some areas have are growing more quickly than others,
like Western Europe, where demand has been slow.
"We still haven't seen, in my opinion, anything like a
complete rebound of the basic economy. We've seen improvement,
but we're not up to anything like the utilization rates in the
steel industry, or some of our other customers, as in 2008."
"The sense we get from our customers is that growth is
going to continue on, but continue at a modest pace."
(Reporting by Carole Vaporean; Editing by Gary Hill)