Molybdenum prices are likely to top US$40/lb in 2009, according to Vancouver's Creston Moly, which is developing its 170Mlb (77,065t) molybdenum El Creston deposit in Mexico's Sonora state.

"Molybdenum is trading at around US$33.85/lb but we see it moving up into the US$40/lb range in 2009 because there is a stranglehold on molybdenum supply," Creston CEO Jonathan George told BNamericas.

Chilean state copper commission Cochilco recently forecast molybdenum, which is not traded on spot markets, to average about US$33.00/lb this year. Molybdenum has stayed at roughly that level since 2007 after rebounding from around US$23.00/lb in 2006 following a high of some US$37.00/lb in 2005.

"Stainless steel demand is huge, particularly in the natural resources field for pipelines, natural gas, anything that requires anticorrosive material needs molybdenum in it," George said.

Chinese tariffs on molybdenum exports from the country will also reduce world supply, leading to an increase in the price of the metal over the years to come.

"Once a lot more of these molybdenum projects get on line in 2011-12, then you'll probably see the price come back down to the US$25-30/lb range. But in the interim, there's a lot of potential molybdenum producers that just aren't getting permits and that won't be online as quickly as they thought," George added.

US company Freeport McMoRan Copper & Gold's Climax moly project in Colorado, US, is expected to come onstream in 2010 and have commercial production of some 30Mlb/y molybdenum, company director of external communications Eric Kinneberg confirmed to BNamericas.

The El Creston deposit holds indicated resources of 92.9Mt grading 0.08% molybdenum and 0.06% copper for 170Mlb molybdenum and 123Mlb copper and holds additional inferred resources of 84.2Mt grading 0.08% molybdenum and 0.05% copper for 141Mlb molybdenum and 92.8Mlb copper contained.

An updated resource estimate is scheduled for September. – Business News