In the past few days, a supplier told me: “Watson, if the price of molybdenum raw materials continues to surge, we’d rather just stop doing business for the time being.” Upon hearing this, I felt a chill in my heart. So, I decided to investigate the matter like Sherlock Holmes and consulted ChatGPT for some insight.
In conclusion:
- The price of molybdenum (Mo) futures has skyrocketed from $20 per kilogram in July 2020 to a peak of $96 in February 2023 (currently settling around $74 in March). In less than three years, the highest point for molybdenum futures prices has exceeded four times the original price.
- China’s molybdenum reserves account for about half of the world’s total, with a production share of 35% in 2018. At the same time, China’s domestic demand accounted for 36% of the global total. As a result, China has historically been a major producer and refiner of molybdenum, with domestic consumption being the primary focus and low export rates (Chile is the main exporting country).
- Over the past two years, China has been purchasing large amounts of molybdenum raw materials in addition to its own production. The reasons for this can be inferred as: ① A recovery in demand for infrastructure projects in the post-pandemic era. ② The addition of molybdenum to the cathode materials of EV lithium batteries can improve charge/discharge stability and extend battery life. As the world’s largest lithium battery producer, China’s increased demand for molybdenum seems reasonable as lithium battery production expands. ③ Molybdenum plays a critical role in the smelting of alloy steel, which is an essential material for ships and defense equipment (fighter jets, submarines, etc).
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