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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (34750)	3/26/2009 10:15:48 PM
From: LoneClone	Read Replies (1) \| Respond to of 193970

Thompson Creek sees stronger molybdenum demand Thu Mar 26, 2009 6:14pm EDT reuters.com By Carole Vaporean NEW YORK, March 26 (Reuters) - Thompson Creek Metals Co (TCM.TO) sees strong long-term demand for molybdenum, though near-term orders should remain weak but steady with some ongoing pick up from Chinese buyers and other customers following later in 2009. After a heavy destocking process over the last few months, some steel producers have given word they may be ready to buy molybdenum again in coming weeks, chief executive Kevin Loughery told an investor and analyst group this week. "We've had conversations with a variety of customers who tell us they are not in the market now, but next month or the month after, there will be some orders forthcoming," he said. While that is not hard information, he added, it is the kind of information the molybdenum miner and producer gets from its customers that it can usually rely on. "We'll have wait and see if that happens. It's somewhat factually based, somewhat anecdotally based, maybe somewhat wishful thinking. But our sense is that the moly market isn't going to get a whole lot worse and should get better. But I don't know when the turnaround will occur," the CEO said. For guidance, he said, indications point to a demand pick up either later in 2009 or early 2010. Molybdenum's hardening and anticorrosive properties in steel make it indispensible in all aspects of oil drilling and pipelines as well as high end uses in chemical processing plants, power generating plants, and desalinization plants. "So, our sense of the molybdenum demand long term is very good. The uses of molybdenum are growing, those industry sectors are growing, products in which molybdenum is used are growing," the executive said. He later told Reuters on the sidelines of the presentation that Thompson Creeks's orders have stayed about the same in recent weeks, just at a slower pace than last year. He also said Thompson Creek began selling molybdenum to Chinese buyers beginning last November and has continued to do so since then, selling directly to steel producers who have contacted the miner for their metal. Loughery said he had no indication that Chinese customers were buying molybdenum supplies for inventory and thought the metal was being put to use for specific projects. "So far, about 20 percent of our material has gone to China," said Loughery. Calling China a wild card, Loughery pointed out that historically the country had been a net exporter of molybdenum and suddenly became a net importer of the metal. "Their demand has not fallen off as quickly. Their stimulus package from the government is more directed to projects ready to be built. Their moly producers come from a number of small mines which are difficult to run at competitive price levels. As the price has fallen, those mines have closed." Molybdenum fell from four-year highs that peaked below $40 a lb then slid in the fourth quarter to current lows under $9. "We're expecting a slightly increasing moly price as the year goes on. We expect it to move up to something like the $10 range on average for the year," Loughery said. At current price levels, he said Thompson Creek is in the breakeven range, "We'd like the price to be above that." (Reporting by Carole Vaporean, Editing by Marguerita Choy)