Molybdenum is on course for a sixth consecutive year of supply deficit in 2027, setting the stage for record prices as strong demand meets a limited pipeline of new production, BMO Capital Markets says in a new report.
Global molybdenum demand climbed 8.5% to 358.2 million lb. in this year’s first half even as supply slipped 0.6% to 335.6 million lb., leaving a 22.6-million-lb. shortfall, according to data from the International Molybdenum Association cited by BMO.
Prices for the metal have soared about 43% to $41.97 (C$59.60) per lb. since Jan. 1, Daily Metal Prices data show. That makes molybdenum a “star performer,” BMO mining analysts George Heppel, Raj Ray and Helen Amos wrote in a report published Thursday.
As no new projects exist to lift output in the short term, the trend should continue in 2027, BMO says. Readily available inventories have been substantially depleted, leaving the market with limited buffers against further deficits, the bank says.
“With molybdenum demand growth looking strong and no major new sources of supply on the horizon, we believe that it is reasonable to expect the deficit to persist into 2027,” Heppel and his colleagues wrote.
“We now expect molybdenum to hit record highs in the coming year, something which is likely underappreciated by the metal market and wider investment community.”
Critical element
Molybdenum, a silvery-white element that’s used to strengthen steel and improve heat and corrosion resistance, is critical to sectors such as aerospace, energy and defence. China, the dominant global supplier, introduced export restrictions on the metal in February 2025 after U.S. President Donald Trump slapped tariffs on Chinese goods.
While incremental concentrate shipments from Myanmar may provide some relief at the margin, “these volumes are unlikely to materially alter the broader supply-demand balance,” the BMO analysts wrote. “In the absence of a more significant supply response, the market may ultimately need to rebalance through demand destruction in the medium term.”
However, demand for molybdenum is difficult to cut quickly. Molybdenum represents only a small share of the cost of many steel and alloy products, while providing key strength, corrosion resistance and high-temperature performance. Although elements such as chromium, nickel, vanadium, niobium and tungsten can replace it in some applications, there is no direct substitute across its broad range of uses.
As a result, “meaningful demand curtailment would likely require substantially higher prices than those seen historically,” the analysts wrote.
Cumulative shortfall
Global demand for the metal grew at a 4.4% annual rate between 2020 and 2025 to 671 million pounds.
Through the end of 2025, molybdenum’s global cumulative shortfall amounted to 108 million lb., BMO says. That’s equivalent to about two months of consumption.
About 60% of global molybdenum production comes as a byproduct of copper mining, particularly in Chile and Peru. Falling copper grades, deeper mines, water shortages, permitting delays, rising capital costs and years of underinvestment are limiting growth in those operations.
Chilean molybdenum production peaked in 2017 and has since declined, while South American supply overall has remained broadly flat for about a decade, BMO says.
While China has historically responded to molybdenum shortages by rapidly increasing production from primary mines, a similar response is unlikely this time, the bank says.
Resource depletion, tighter environmental and safety rules and a shift toward higher-value manufacturing have made Chinese mining less responsive to higher prices. Although large projects such as Zijin Mining’s Shapinggou are under construction, they aren’t expected to reach full output before around 2029. Until then, new Chinese supply should be limited.
Few options
China is also unlikely to solve the shortage through imports, according to the report.
Unlike antimony and tungsten, where China has been able to increase imports from flexible sources, there are few comparable external sources of molybdenum. Myanmar has increased shipments, but much of the material is low-grade ore rather than conventional molybdenum concentrate. Kazakhstan has also boosted output from copper mines, but BMO expects little further growth from the country.
More than 80% of molybdenum consumption is tied to metallurgical applications, including engineering and stainless steels. The metal is also widely used in oil and gas infrastructure, refining, power generation, chemical processing and other high-temperature and corrosion-resistant applications. Continued demand from energy infrastructure represents a key driver, BMO says.
A handful of producers and developers stand to benefit from the tightening market. BMO’s preferred miner is Centerra Gold (TSX: CG; NYSE: CGAU), whose molybdenum business includes the Thompson Creek mine in Idaho and the Langeloth processing facility in Pennsylvania. Thompson Creek is targeting production in mid-2027.
“Against tightening supply, Centerra offers one of the few listed avenues to a vertically integrated North American molybdenum platform,” Heppel, Ray and Amos wrote. The approaching completion of Thompson Creek’s capital program provides “a clear catalyst for greater market recognition.”
Among diversified U.S. miners, copper producer Freeport-McMoRan (NYSE: FCX) has the strongest molybdenum exposure through its Climax and Henderson mines in Colorado, BMO says. Molybdenum accounts for 7.3% of the company’s revenue, BMO says.
Freeport’s Grasberg copper mill reaches 67% after mudslide