Mining outlook: MolyExp Releases Report: Unusual Stock Accumulation in China Will Be Key to Molybdenum Market Evolution



    
    - According to Pablo Bascur, MolyExp managing partner, the incipient
    recovery of moly prices is not a response to an increase in consumption,
    and that China will play a key role in upcoming quarters

    
    SANTIAGO, Chile, Sept. 2 /CNW/ -- The incipient recovery of molybdenum
prices observed during 2Q09 does not respond to a true increase in
consumption. According to Moly Market Outlook, a study conducted by the
consultancy firm MolyExp, the enormous and unusual accumulation of molybdenum
inventories in China during 1H09 will play a key role in moly prices in future
quarters.
    Pablo Bascur, managing partner of MolyExp, explained, "For example,
Chile's total molybdenum production for 2008 is equivalent to the amount of
the excess of stock accumulated in 1H09. It is interesting to note that in
this period, 40% of Chilean molybdenum oxide exports were shipped to China,
while no molybdenum oxide was shipped to that country in 1H08."
    The report highlights the prominent role played by China in the
molybdenum market, in which it went from being the primary global producer in
2008, with exports of 25 million pounds, to becoming a net importer in 1H09,
acquiring 35 million pounds from Western operations and absorbing all the
excess stock in the rest of the world.
    "The tight market in the West has doubled the prices between April and
August of this year, despite the fact that for the first half of 2009, the
apparent consumption in the West decreased over 40% with respect to the same
period in 2008," Bascur concludes.
    Regarding future prices behavior, Bascur says that depending on how those
stocks are managed, "We may see a high level of volatility over the next few
quarters. In fact, we do not rule out prices as high as US$20 or 30 per pound,
but prices could also go lower than US$10, as we recently observed ."
    For its 2009 report, MolyExp makes projections regarding demand, analyzes
projects likely to materialize, and considers the evolution of supply and
prices, as well as examines China's role in the next eight years.
    All of the information regarding future prospects for molybdenum for the
2009-2017 period are available to market analysts and industry experts at
www.molyexp.com.




For further information:

For further information: Gonzalo Valenzuela, Extend Comunicaciones,
+011-56-2-437-7700, gvalenzuela@extend.cl, for MolyExp Web Site:
http://www.molyexp.com

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