Prices for molybdenum, a base metal used to make stainless steel, will likely rise 55% in the next two years, JP Morgan analysts said Thursday.

"We also see more sustainability in the recent surge in moly prices compared to the spike this summer," analysts led by Michael Gambardella wrote in a report on Canadian molybdenum miner Thompson Creek Metals (TC 15.16, +0.91, +6.39%)(CA:TCM 15.53, +0.88, +6.01%).

"Moly inventories remain very lean," they wrote.

The price for the metal is currently about $15.5 a pound, which is up from $10.70 in November.

Gambardella anticipates prices will climb to $21 by the end of this year and $24 by the fourth quarter of 2011 as global industrial output expands.

Based on the expected rise in molybdenum prices, J.P. Morgan expects Thompson Creek will make $2.25 a share in 2011, up 68% from an expected $1.34 a share this year.

The brokerage kept its 12-month price target for Thompson Creek shares at $19 a share.