Molybdenum is poised for its sixth consecutive year of supply deficit in 2027, driving prices to potential record highs. According to BMO Capital Markets, global demand for molybdenum surged 8.5% to 358.2 million pounds in the first half of this year, while supply dipped 0.6% to 335.6 million pounds, creating a 22.6-million-pound shortfall. Prices have already climbed 43% since January, reaching $41.97 per pound, making molybdenum a standout performer in the metal market.
The supply deficit is expected to persist due to limited new production projects. BMO analysts George Heppel, Raj Ray, and Helen Amos highlighted that readily available inventories have been depleted, leaving little buffer against further shortages. They noted that molybdenum's critical role in strengthening steel and improving heat and corrosion resistance makes it indispensable in sectors like aerospace, energy, and defense.
China, the dominant global supplier, introduced export restrictions on molybdenum in February 2025, exacerbating the supply issue. While Myanmar and Kazakhstan have increased shipments, these volumes are unlikely to significantly alter the supply-demand balance. BMO analysts suggested that the market may eventually need to rebalance through demand destruction, though this would require substantially higher prices than historically seen.
Among the few producers positioned to benefit from the tightening market, BMO highlighted Centerra Gold (TSX: CG; NYSE: CGAU) and Freeport-McMoRan (NYSE: FCX). Centerra's Thompson Creek mine in Idaho and Langeloth processing facility in Pennsylvania are key assets, with Thompson Creek targeting production in mid-2027. Freeport-McMoRan, a major copper producer, has strong molybdenum exposure through its Climax and Henderson mines in Colorado, where molybdenum accounts for 7.3% of the company's revenue.