How to Invest in Molybdenum
Molybdenum is a hard, silvery-white, malleable, metallic element that was discovered in 1778. Molybdenum can be found in the form of molybdenite and wulfenite in nature. This metal is best known for its uses in high-strength steel alloys thanks to its high melting point and resistance to corrosion. Much of the supply is obtained as a by-product of copper mining; major producers include the United States, China, and Chile.
A play on molybdenum can be thought of as a bet on the growth of the global industrial sector. This metal is used in aircraft parts, automobile parts, power plants, ships, oil & gas pipelines and even fertilizers. Molybdenum is also used as a high-performance lubricant and catalyst in chemical applications, making this an incredibly versatile commodity.
Ways to Invest in Molybdenum
There are 3 ways to invest in Molybdenum: ETFs, Futures, and Stocks. Click on the tabs below to learn more about each alternative.
What are Molybdenum ETFs?
Though there are currently no pure play ETFs which offer exposure for to this strategic metal. However, the Market Vectors Rare Earth/Strategic Metals ETF (REMX) offers exposure to a number of firms that mine for molybdenum in addition to other rare earth metals. Note that as a mining fund, REMX will represent something of a leveraged play, as stocks of producers can be more volatile than commodity spot prices themselves. It is also important to note that REMX is an indirect play on molybdenum and as such, its price will not always move in tandem with the commodity itself.
What are Molybdenum Futures?
Molybdenum futures trade on the London Metal Exchange under the symbol MO. Trading for these futures contracts commenced on February 22, 2010. These contracts trade in lots sizes of 6 tonnes and are priced in U.S. dollars and cents per tonne. Contracts are physically settled and delivery points are in Rotterdam, Baltimore, Singapore, and Antwerp; the product is delivered in drums and has minimal impurities.
How to Buy Molybdenum Stocks
There are a wide variety of companies who rely on molybdenum for a substantial portion of their revenues. General Moly (GMO) is a U.S.-based company engaged in the exploration, development, and mining of molybdenum; GMO’s operations are primarily focused in Nevada. Thompson Creek Metals Company Inc. (TCM) is Colorado-based mining company with operations in the U.S. and Canada; this is one of the largest publicly traded pure molybdenum producers. There are also a number of diversified metals companies engaged in the exploration and production of molybdenum, like Mercator Minerals (ML), Northern Dynasty Minerals (NAK), and Molycorp (MCP).
Molybdenum in the News
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