NEW YORK Molybdenum prices wont improve without an
economic catalyst to boost global demand, and Thompson Creek
Metals Co. Inc. is unlikely to resume stripping at its namesake
mine until prices improve, chairman and chief executive officer
Kevin Loughrey told AMM
Loughrey acknowledged that falling molybdenum prices had hurt
Denver-based Thompson Creeks first-quarter earnings,
leaving the company vexed (
amm.com, May 9
). It is very frustrating, but
you wouldnt find a person here who is surprised, he
said. Its a mining business. We sell a commodity
over which we have no control in the price, so you just have to
put your nose down and do the best you can.
While Loughrey does expect pricing to improve in the near
future, when exactly things will improve is beyond the
capabilities of my myopic crystal ball, he said.
Whats holding back the moly market in terms of
pricing is weakness on the demand side. We had anticipated
growth year over-year, but that additional moly consumption in
the main just hasnt happened. So youre in an
oversupply situation, he said. Consequently, you
end up with very little moly being traded in spot markets and
it stagnates. We need some catalyst in the world economic
engine to bring demand back up.
The drop in molybdenum prices over the past year is also likely
to prolong the suspension of stripping activity at the Thompson
Creek Mine, which began in October 2012 (
amm.com, Oct. 3
Right now were making good money at Thompson Creek
despite the fact that prices are low, but well run out of
ore at the end of 2014 if we dont recommence stripping.
We need a price better than (the current one) to recommence
stripping, but its not just the price. We also would need
a sense that the price will move ahead for a while. If we
dont do that, by 2015, well be in care and
maintenance, he said.
molybdic oxide price is currently in a
range of $10.90 to $11.30 per pound.
Meanwhile, Loughrey said that the company is continuing the
search for his replacement as chief executive officer ahead of
his retirement (
amm.com, Nov. 9
). He recently agreed to remain as
chairman for an additional year.
So far it hasnt felt like Im in the course of
retiring. The effort to find a replacement CEO is moving: There
has been a board subcommittee formed that will do some
interviewing soon and start coming up with a shortlist, so I
think in the late third quarter or early fourth quarter we
should see something there, he said.