Coming at a seasonally slow time of year, the cutbacks in the. stainless sector have clearly had some effect on the moly markets - at least in terms of sentiment. But it would be quite wrong to give the impression of a demand collapse. True, femo suppliers have had to accept cuts in contractual deliveries in Europe. But there has been very little cutback in the US and demand has remained buoyant in Japan, with producers actually picking up extra business in recent weeks. The Japanese mills are strong in 316 grades of special steels, where the boom in energy-related capital projects is underpinning demand very effectively. When will the rising tide of moly supply finally reach the market? Mine output for January-June is reckoned to be over 15 percent ahead of last year. This is despite a fall of at least 15 percent in Chinese production, barely compensated for by Western World primary mines and new capacity in Myanmar. The real growth has come from copper mines in the Americas. Though 2004 saw the biggest advances, Codelco has still notched up a gain of over 14 percent in 2005. Antofagasta has achieved 27 percent, Antamina and Southern Peru are up by about a half, and Kennecott has raised output almost three-fold. True, increases from selective mining will be offset in future years. But in the mean time there are large amounts of concentrate to treat and Western World roasters are full.
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