Houston, September 16th (Argus) - According to the participants at the annual general meeting of the International Molybdenum Association held in Salt Lake City, Utah last week, after the continuous decline in mine supply and the reduction in by-product recovery, global molybdenum supply is expected to remain tight until 2027.
According to the data of the International Molybdenum Association, compared with the same period last year, global molybdenum consumption in the first quarter of 2026 is estimated to increase by 5%, reaching 180.7 million pounds. Meanwhile, the global production growth slowed by 2% to 184 million pounds during the same period, resulting in a deficit of 12.3 million pounds in that quarter.
The increased demand for molybdenum from Chinese steel manufacturers conflicts with the decline in the grade of existing molybdenum ore, consolidating China's position as a net importer of this metal. China is the world's largest consumer and producer of molybdenum, according to customs data, with imports of 112.3 million pounds of unroasted molybdenum concentrate from January to July this year, up 47.4% compared to the same period in 2025.
Market participants expect that due to stricter regulatory frameworks and continued disruptions in mines limiting domestic supply, China's molybdenum concentrate imports will remain high in the coming months.
After a major coal mine accident occurred in Shanxi Province in May this year, relevant departments conducted safety inspections on several coal mining companies in Luanchuan County, Henan Province. Luanchuan County is a major molybdenum-producing area.After the adverse weather in Chile and the maintenance of major operations in the first half of this year, the reduction in copper production in Latin America and the decrease in copper mining by-product recovery also limited the molybdenum supply throughout 2026.
According to the data of the national-controlled copper commission Cochilco, in the first half of this year, copper mine production in Chile decreased by 7.8% to 18,834 tons, mainly due to the decline in production of several key Codelco operations. According to the data of Cochilco, the molybdenum production in Peru decreased by 4.3% to 16,100 tons from January to May this year, while the molybdenum production in Mexico decreased by 10.5% to 6,300 tons.
Some supply growth opportunities are expected to come online within the next decade. Centerra Gold's primary molybdenum Thompson Creek Mine in Idaho, USA, plans to commence molybdenum production in the middle of 2027, with an average molybdenum production of approximately 13 million pounds per year. Market participants expect that China's projects will drive further supply growth in this decade, including Zijin Mining's Shapigou Molybdenum Mine, which is expected to reach an extraction output of 25,000 to 35,000 tons by 2028.
Demand driven by aerospace and defense
Market participants expect that as the war between the United States and Iran continues, the supply of US missiles will be exhausted, and the demand for molybdenum in defense and aerospace applications will increase until next year.
The bipartisan think tank Center for Strategic and International Studies (CSIS) estimates that according to the plan, it may take several months to nearly five years to rebuild the US ammunition stockpile to pre-war levels. The package of assistance designated for Ukraine and representing allies to strike Iran requires the US to fulfill additional arms orders.
On September 10th, the European Union approved a 6.1 billion euro (7.05 billion US dollars) fund for Ukraine to purchase various defense products, including US-produced missiles.
Other market participants pointed out that the demand for molybdenum as a substitute for tungsten in the semiconductor manufacturing industry is likely to increase. This is because as the size of chips shrinks, molybdenum exhibits better electrical conductivity. However, compared to aerospace and defense, the quantity of molybdenum remains relatively small.
