Moly oxide prices will be higher next year, Molymet’s Graell

The average molybdic oxide price in 2010 will be higher than in 2009, John Graell, ceo of Chile's molybdenum converter Molymet, told MB.

"I wouldn't risk estimating a price, but the 2010 average will be higher than 2009's, although I don't think the difference will be greatly significant," Graell said, responding to the recent forecast of an average price of $17.50 per lb in 2010 by Catherine Virga, senior base metals analyst at CPM Group (MB Oct 14).

Meanwhile, Graell still expects an average of around $11 per lb for the whole of 2009, a figure he forecast in June (MB Jun 8).

At that time, prices were around $9.80-10.50 per lb and recovering from levels as low as $7.70-8.30 per lb in mid-April. But Graell had warned that "highs and lows" could still affect the market.

His words proved prescient, as prices rose to $18.30-18.70 per lb by mid-August before dropping again, trading at $13-13.50 per lb in the last two weeks.

"I think volatility will accentuate in the long term, and not only in the molybdenum market but in other metals markets and in the industry in general," he said, adding that companies will have to prepare for this new scenario.

Still higher prices in the second half are driving Molymet's utilisation rate upwards.

During the first half, the company worked at around 80% of its installed capacity of roughly 150 million lb per year and, in the second half, the level will reach 90% on average, Graell said.
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At the start of January, the company will start-up its new roaster furnace in Mejillones, Chile, which will be able to produce 33 million lb per year.

"By the end of the first quarter we already plan to reach full output there," he said.

Molymet also plans to build another furnace in Mejillones, which would take total capacity to 67 million lb per year.

The company recently submitted a request to Chile's environmental authorities to construct the furnace and is now waiting for the permits to continue its studies.

In China, the company has been granted environmental approval to build a molybdenum processing plant in Inner Mongolia, which could be commissioned by the end of 2012 and have a capacity of around 18 million lb per year.

The plant would represent Molymet's debut in the Chinese market.

"We are now finalising technical studies in order to take them to our board in the first half of next year," Graell said.