Strictly: Drilling

[Old Frank P]

KC, howzit going... has Mr. Market stopped you out of anything yet? A couple of my favs are holding up well in this latest heartbreak .... Anooraq (ARQ.V) First Point Minerals (FPX.V) and Western Copper Holdings (WTC.TO)

Here's an interesting story on the possible upcoming shortages in the metals:

Molybdenum price panic continues, market soars
By Martin Hayes

LONDON, June 5 (Reuters) - The unprecedented rise in molybdenum prices continued in Europe on Wednesday, with a panicky market soaring to levels last seen over seven years ago, amid a scramble for scarce supplies.

Traders said a welter of production cuts and curtailments at major copper producers in North and South America and reduced Chinese exports have had an involuntary impact on molybdenum, which is a by-product metal.

"There are just no concentrates around -- it is a real shortage here," one UK trader said.

"No-one can say with any certainty what the price should be - it changes a couple of dollars in a few hours," a trader in Europe said.

Molybdenum oxide (MLY-OXIDE-LON), which is used mainly as an alloying additive in steel production to enhance strength and corrosion resistance, was around the $8.00/9.00/lb on Wednesday, the highest since April 1995.

Oxide values have risen some $3.00 from late last week, having been as low as $2.25 a lb in late 2001.

Western origin ferro-molybdenum (MLY-FERRO-LON) is also around the highest since April 1995 at $18.00/19.00/kilo.


COPPER CUTBACKS RESPONSIBLE

Western output has been hit by both reduced production from primary mines and less by-product availability from copper miners who reduced output late last year in the face of a weak copper market.

By-product molybdenum accounts for around 60 to 70 percent of total output.

There was a spate of production cuts in 2001 by major copper producers, which was followed by a period when there were no major output curbs.

Over the last week, however, BHP/Billiton (London:BLT.L - News) has cut output by 80,000 tonnes at its majority owned Escondida copper mine in Chile, Grupo Mexico has said it will shut operations at its Cananea copper unit, cutting 150,000 tonnes in annual output, while a power blackout caused by an intense snowstorm in Chile halted copper production at the Los Bronces mine, owned by a unit of Exxon Mobil Corp. (NYSE:XOM - News).

Demand has held up relatively well, meanwhile, as molybdenum is used in aircraft, missile, and automobile parts, and in electrodes and heating elements. There are few acceptable substitutes.

The powerful price rally has led to stockbrokers reconsidering their ratings for Phelps Dodge (NYSE:PD - News), which is the world's largest producer of molybdenum.

J.P. Morgan trimmed its loss per share estimate to $1.40 per share from $1.65, leaving its "buy" rating unchanged.

Meanwhile, Merrill Lynch analyst Daniel Roling raised his mid-term rating from "reduce/sell" to "neutral".

"As a result of a significant increase to our molybdenum price expectations, we are raising our estimates for 2002 from a loss of $2.75 per share to a loss of $2.20 per share. We are also raising our 2003 earnings estimate from $1.40 per share to $1.80 per share," he wrote.

(Additional reporting by New York Newsdesk and New York Raw Materials Desk)
http://biz.yahoo.com/rc/020605/markets_metals_molybdenum_1.html