The future of molybdenum (moly) is bright especially considering the recent surge in the energy sector to satisfy global demand for energy. The consumption of molybdenum is expected to increase throughout the next decade. 

You may have never heard of moly or even be able to pronounce molybdenum (mole-ib-denum), nevertheless it isn't a requirement for investing in the highly sought after white metal. Molybdenum is primarily used in alloys, catalysts and electrodes. It is a metal used in the production of stainless steel. When added to steel, molybdenum helps steel endure both high and low temperatures as well as resist corrosion. As a result, this molybdenum is highly valued for use in nuclear power plants, oil drill rigs and oil or natural gas pipelines.

The production of stainless steel accounts accounts for approximately 25% of the demand for molybdenum. Molybdenum also provides resistance to many elements that are corrosive to steel. The auto industry uses moly-coated steel extensively to give their vehicles greater longevity. Demand for molybdenum as a catalyst is expected to grow over the next few years. This is due to stricter vehicle emission regulations.

Where molybdenum comes from?

According to the International Molybdenum Association (IMOA), China holds 43% of the world's molybdenum reserves, followed by the United States with 28%.  In total, molybdenum reserves are estimated at approximately 19 million tons.  The IMOA reports that over 400 million pounds were produced in 2005. That's was a 16% increase over the 2004 figures.

Molybdenum is usually found in occurances with other elements, mostly in sulfide minerals of other metals-particularly copper.
With the recent base metals bull market cycle, molybdenum has become a welcomed extra sought after bonus. Prices for molybdenum have risen dramatically since 2000 when it was only $2.00 per pound. Recently the price of molybdenum topped over $26. per pound - more than a ten fold increase! 

Most Molybdenum Comes From Copper Mines
Industry estimates that annual global mined production of molybdenum amounted to just over 180,000 metric tons in 2005. It is also estimated that over 60% of annual mined production of molybdenum comes as a byproduct most commonly associated as a byproduct with copper production. The five largest producers consisting of the United States, Chile, Peru, Canada and Chile account for over 85% of world molybdenum mine production for the past decade. 

Specific Industry Applications for Molybdenum

One large market for molybdenum is it's use in the oil and natural gas industry. According to IMOA officials, molybdenum when added to stainless steel in up to 7% amounts will strongly improve the corrosion resistance in a wide variety of environments. It is especially effective in improving pitting and crevice corrosion resistance in hostile environments.  When applied in the manufacture process to drilling rigs and pipelines - molybdenum becomes a highly sought after component.

Major oil companies have only about 50% of the drill rigs from decades ago yet the demand for energy is unabated. This translates to increased demand for additional molybdenum. The environment of future drilling locations is getting harsher as exploration for oil and gas extends around the globe. Drilling in arctic temperatures for eaxmple will put a major strain on equipment and molybdenum will help the steel survive longer in the frigid temperatures.

Below the surface, molybdenum will be vital for deep-water drilling applications. Saltwater can be a corrosive agent and molybdenum will help protect the drilling equipment from premature corrosion. The length of pipelines being constructed is enough to wrap around the earth three times and molybdenum will play a substantial role in preserving and protecting those pipelines.

Investing in Molybdenum

Most molybdenum mine production is conducted by just a few companies. One good example is Blue Peral mining. Blue Pearl Mining Ltd. owns the Davidson Deposit in B.C., Thompson Creek mine and a concentrator in Idaho, a 75% interest in the Endako mine, concentrator and roaster in British Columbia and the Langeloth metallurgical refinery plant in Pennsylvania. Blue Pearl Mining is an integrated North American primary moly producer.

Since the bulk of molybdenum produced is used for metallurgical purposes, the price of steel needs affects the price of molybdenum. The demand for steel and price of steel is currently being fueled by the expansion in the Chinese economy. In 2006 the Chinese economy grew by approximately 10% and the forecast for continued growth remains intact and hence the outlook for steel use and steel prices remains high. 

There are other companies which explore for molybdenum. ROK.V, TCR.V, CYU.V, GXM.V