London 13/07/2016 - Production and consumption of molybdenum both declined in the first three months of this year, with a steeper fall in output moving the supply/demand balance into deficit, figures issued by International Molybdenum Association (IMOA) show.
Global production dropped to 117.8 million pounds in the first quarter of 2016, down five percent from 124.1 million pounds in the final quarter of last year and down seven percent on the same year-ago period.
Consumption also fell to 121.2 million pounds, down two percent from 123.7 million pounds in the previous quarter and a six percent drop on the same period in 2015, according to the IMOA figures.
The changing supply/demand picture that emerged early this year contributed to the market's strong recovery from 14-year lows of $4.75 per pound for molybdenum oxide (MO3) at the end of 2015, traders said.
A scramble for material by mills lifted prices to $8.25 per pound by the end of May, the highest for 17 months. The market is currently around $7.00 per pound, retracing going into the slower summer period.
South America remained the biggest producer, the IMOA said, at 44.6 million pounds in the first quarter of 2016, down just one percent from 45.1 million pounds in the previous quarter.
"Production in China fell from 39.5 million pounds in the last quarter of 2015 to 34.7 million pounds in the first quarter of 2016, a fall of 12 percent," it added.
China remained the biggest end-user, accounting for 38.6 million pounds in the first quarter, down 10 percent from 43.1 million pounds in the last quarter of 2015. Europe was the second-largest user at 33.4 million pounds, down four percent from 32.5 million pounds in the same comparison.
(Editing by Mark Shaw)