General Moly expects molybdenum market rebound-CEO

By Carole Vaporean

NEW YORK, June 17 (Reuters) - U.S. miner General Moly Inc (GMO.A: Quote, Profile, Research) sees the molybdenum market poised for a rebound with a pick up in demand growth and limited new supply sending prices to a peak in 2012, said Chief Executive Officer Bruce Hansen.

Demand for the minor metal, used as a strengthening and anti-corrosion agent in steel, should increase as low inventories get replenished, China turns net importer and consumers start to increase purchases, he said.

On the supply side, limited growth of copper mines with molybdenum as a by-product and disciplined output cuts at both primary and by-product molybdenum mines following sharp declines in global demand should help support prices, Hansen told the New York Society of Securities Analysts recently.

"Moly inventories have remained low and are projected to remain relatively low going forward, partly because there are no new primary moly mines currently in development," he said.

"And we've seen the Chinese, who historically have been net exporters, turn net importers after shutting some high-cost operations and buying Western moly-oxide production," he said.

Citing analysts' average forecasts, he said, molybdenum prices should peak in 2011 to 2012 in the $18 to $22 a lb range, with long-term averages ranging from $13 to $15 a lb.

Molybdenum oxide prices MLY-OXIDE-LON rose to $10.25 a lb in June from a five-year low around $8 in April, but remain well below last year's high at $34 per lb.

General Moly sees only a small 0.4 percent annual growth rate from 2008 to 2013 for copper in the Americas, where much of the by-product molybdenum is mined.