Molybdenum: "made in China 2025" is expected to reshape the consumption pattern of molybdenum
Molybdenum metal elements is indispensable in modern industry, iron and steel is one of the main application fields of molybdenum is used widely in modern industry, according to the direct application to points, more than eighty percent used in the manufacture of molybdenum alloy steel, stainless steel and other alloy, 13% ammonium molybdate, sodium molybdate, organic molybdenum, etc, used in chemical field, the remaining 5% molybdenum wire, molybdenum metal, used for light bulbs, tube and electronic industry, mold manufacturing, high temperature, such as the integrated circuit with the original, aerospace and nuclear industry and other high-tech fields. From the perspective of terminal consumption, molybdenum metal is used in all aspects of modern industry.
Molybdenum is the biggest consumer of steel. The main function of molybdenum in steel is to improve the properties of steel: to improve the strength and toughness of steel, to improve the corrosion resistance of steel in acid and alkali solution and liquid metal, to improve the wear resistance of steel, to improve the hardenability, weldability and heat resistance of steel.
With the adjustment of steel consumption structure, China may become the strongest growth pole of molybdenum demand. Compared with the developed countries such as the United States and Japan, domestic steel consumption tends to the construction sector, while the development of machinery and equipment manufacturing related to the manufacturing industry is relatively weak. With the continuous advancement of "made in China 2025", China's steel industry may face structural adjustment, alloy structural steel, high-speed tool steel, high-end stainless steel and other high-end steel is expected to become the consumption highlights in the next few years, driving domestic molybdenum demand to maintain high growth, China is expected to become the strongest growth pole of global molybdenum consumption.
Combined with the recovery of the us oil industry, the growth of global molybdenum demand is expected to benefit from the recovery of crude oil prices since mid-2016 and the global active rig count bottoming out in May 2016 and gradually recovering. The biggest increase came from the us. The recovery in U.S. oil activity is driving the use of molybdenum chemicals (molybdenum catalysts in the oil industry), and U.S. demand for molybdenum alloy steel and stainless steel is expected to grow significantly as offshore oil platforms are built and put into production in the gulf of Mexico.
In this context, global molybdenum demand is expected to maintain a high growth rate in the next three years. We estimate that the growth rate of global molybdenum demand from 2018 to 2020 May reach 6.84%, 6.93% and 7.20% respectively. The supply is expected to shrink, and the balance sheet of molybdenum supply and demand is in repair period to sort out the supply situation of global molybdenum ore. In terms of associated molybdenum ore, under the background of almost no increase in copper supply in 2018, the increase of associated molybdenum is limited, mainly depending on the level of molybdenum grade in the mining section in that year; Primary molybdenum is mainly concentrated in China, on the one hand, the price of molybdenum is still at a low level, the cost of primary ore is high, manufacturers have little incentive to invest and resume production, on the other hand, the domestic environmental situation is becoming stricter, there are still many uncertainties in the production of small and medium-sized molybdenum mines. In conclusion, we estimate that the global molybdenum production will decline by 2.67% in 2018, and the growth rate of the global molybdenum production will be 5.91% in 2019 and 8.06% in 2019.
