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Post says Thompson Creek feels weight of moly's plunge

2008-11-11 09:07 ET - In the News

The Financial Post reports in its Tuesday edition that even in an environment of declining metal prices, the sudden and violent drop in molybdenum prices has left investors in shock. The Post's Peter Koven writes that moly had looked like the one bright spot in the commodity world through September and most of October. Prices were holding around $32 (U.S.) or $33 (U.S.) a pound, which is where they had been for more than a year. Last week, they plummeted to $12 (U.S.) and could go to $7 (U.S.). "Looking at market reports, we're hearing of trades in single digits. It's an amazing decline," said George Topping, an analyst at Blackmont Capital. Industry insiders cite a couple of reasons for the metal's sudden fall from grace. First there is chaos in London, where traders who borrowed money to hold moly inventories are having their lines of credit pulled and are forced to liquidate their holdings at virtually any price. A bigger concern is on the demand side. With the global growth picture weakening due to the credit crisis, a number of steelmakers have stopped buying new material. On Friday, Thompson Creek Metals Company said it would delay its Davidson moly project in light of weaker prices.

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