Lots of articles late last week regarding an uptrend for Molybdenum, JP Morgan stating it should jump 55% over the next 2 years. http://www.marketwatch.com/story/molybdenum-prices-to-rise-55-in-two-years-jpm-2010-01-14?reflink=MW_news_stmp
Below is a different article. Thursday, January 14, 2010
Molybdenum poised for massive comeback by Metals Place
Thompson Creek said that molybdenum and cobalt have underperformed and the other metals took off while cobalt and Moly hibernated. Moly a year ago was trading at 8.5x the price of copper, now it's only 3.5x the price. Moly to nickel was at 2.6x, now at 1.4x. At molybdenum's peak in 2005, it was trading at a price 28 times that of copper.
But, Moly and cobalt are going to have a future, and that future comes next month when the London Metal Exchange launches the first ever futures market for these ignored minerals.
These minerals have been priced too low compared to those already traded in the futures market. The added sauce to the coming Moly cobalt price surge will be the speculators. Copper, nickel, aluminium have all been climbing despite big run ups in stores.
The future for those that mine molybdenum look bright. TC has underperformed these last 6 months. Metals Place championed the stock in the past and told investors to get out at USD 14.
Thompson Creek spooked investors in August when it did a large secondary offering. Investors worried that the company would buy another miner at inflated prices. The boards had been full of guesses at what it would buy. No one thought it would do the obvious with the cash: invest in itself. TC recently announced a massive build out of its mining assets.
Management has been superb at timing the molybdenum market. They bought the company right before the molybdenum market heated up. At the very top, when the stock price was about USD 22, they did a large stock offering. That was immediately before the great commodity and market crash. As a result, they went into 2009 with a boat load of money. Other companies were cash poor.
On the rise
Molybdenum prices continued to rise at the end of last week on strong Asian buying, according to market.
Firm demand from Asia has seen prices increase over the first trading week of the year, and prices could push significantly higher once European steel mills return to the market.
European consumers are yet to return to the market after the new year break, traders said.
"The European marketplace is still more dominated by talk than business, as consumers are not yet back from vacation," a trader said.
Metals Place
STZ Price at posting:
6.1¢ Sentiment: Buy Disclosure: Held
