LONDON, June 21 -- Prices of stainless steel material molybdenum could rise to $18 a lb later this year as tighter supplies meet demand recovery, U.S.-based commodity research firm CPM Group told Reuters.
Catherine Virga, an analyst at CPM Group, said prices of the metal could average $24.50 a lb next year compared with averages around $14.50-$15 over the next couple of months.
"China's government imposed a quota on molybdenum mine production in late March of this year," she said.
"If reduced growth at some small scale primary mines is realised in China, concerns over future quotas and the lag in global supplies could pressure prices up in late 2010."
She added that demand is expected to recover more swiftly than supply and because of this the market could be tighter next year.
China is the world's largest producer of moly, accounting for about 35 percent of the market estimated at more than 425 million lbs. Stainless steel producers account for about 26 percent of global consumption.
Prices of molybdenum oxide are at around $14.50 a lb on the spot market in Europe compared with around $11.50 in January and around $18 in April.