Geological data, production trends and current projects underway suggest that enough molybdenum will be available from more diversified sources to meet the world's growing demands. The growth in molybdenum consumption has been primarily related to its beneficial effects as an alloying agent in steel. This rapid growth has been deliberately fostered by stable prices, adequate supply and application research. The molybdenum industry is now in a process of change which has been seen in several other metals, such as aluminum and nickel. As supply sources have become more diversified, the market has become more competitive. The recent drop in consumption has led to excess production capacity, accumulation of substantial producer inventories and increased market uncertainties. While consumption is expected to increase in the next two to three years, it will take some time to absorb the excess capacity and inventory. The increased proportion of by-product capacity indicates that prices may become more variable. Producer discipline will be required to prevent serious price erosion in times of surplus. Future prices may not continue to increase with inflation.
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