The World’s Inventory Of Molybdenum Has Quietly Fallen To Zero

Molybdenum

The World’s Inventory Of Molybdenum Has Quietly Fallen To Zero by Dave Forest

Here’s a story you haven’t heard anything about. But which might vault into the headlines of the mining investment world very, very soon.

World molybdenum stocks are nearly gone.

That was revealed in data released last week from the London Metal Exchange. With a monthly report from the world’s premier metals trading platform showing that molybdenum stocks have plunged over the last four months at a shocking rate.

As the chart below from LME clearly shows, warehouse stocks of molybdenum began to decline this past May. With the shipments of metal out of warehouses accelerating in July and August — resulting in total inventories falling to below 20 tonnes. A reduction of more than 80% in just a matter of weeks.

You can see the pattern of growing outgoing deliveries in the monthly bar chart below. All told, net outflows from LME warehouses have been 108 tonnes.

Molybdenum

The outgoing shipments over the summer are especially notable in comparison with the placid trading that LME moly saw during the previous 8 months. Both charts above show that warehouses had been mostly idle up until May — with overall stock levels holding almost exactly even since August of last year.

Perhaps most interestingly, LME reported that the drop in inventories has come as global molybdenum prices have been rising. The chart below shows how prices began to take off in early May — just as outgoing deliveries from warehouses began to pick up.

Molybdenum

Molybdenum

Prices have continued their strong trend up till the end of August. Having gained nearly 35% since April.

Of course, it’s hard to tell what’s chicken and what’s egg here. Metal could be moving out of warehouses because rising prices are encouraging sales. Or prices could be rising because buyers are eying the increasingly scarce supply.

Either way, this is an important situation for mining investors to keep an eye on. Watch for LME data next month to see if the drawdown is continuing — and check moly prices for continued upward momentum.

Here’s to a star rising,

Dave Forest

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)






About the Author

PiercePoints
Dave Forest writes Pierce Points Free Daily E-Letter, an advisory on mining and energy read every day by BP, Rio Tinto, JPMorgan, BNP Paribas, Repsol, GDF Suez, GE, Platts, Warburg Pincus, and the UN. Sign up for free at www.piercepoints.com. Mr. Forest has funded and managed over $80 million in global exploration and development in natural resources, and continues to design and develop projects globally. He is a professional geologist.

Be the first to comment on "The World’s Inventory Of Molybdenum Has Quietly Fallen To Zero"

Leave a comment