Earlier this month, a reporter for Business Edge (Ontario edition) was pondering investment advice you might receive during a fancy lunch with different financial gurus including Warren Buffet, Jim Dines, and Eric Sprott. He said of Eric Sprott: “It would be difficult to find a smarter market player than Canadian money manager Eric Sprott, anywhere.” Because the reporter was evaluating the dollar value of an auctioned “charity lunch” with an investment guru, he adorned his wits: “This lunch could be worth a dime if Sprott let you in on the next big thing. “. Toronto-based Sprott Asset Management has consistently been at the forefront. “

And what could this secret tip be? Perhaps moly could become the next big thing. We spoke to Maria Smirnova, a research associate at Sprott Asset Management, who spoke positively of the metal: “I think the key to the story of molybdenum is its wide-ranging applicability, especially in the energy sector.” He added: “This specialty metal is used in oil and gas pipelines, hydrocarbon desulfurization, oil drilling rigs, pollution control equipment and nuclear power applications.” Energy bulls, perhaps even Sprott’s team, which has bet heavily on the energy sector and invested in two junior moly, believe the world will need more “moly” during this commodities boom.

“It’s not sexy or glamorous,” Bart Jaworski, a uranium analyst at Raymond James, Canada, told us during a phone chat a few months ago, “and it’s also dominated by the Chinese.” Well yeah that’s true, but isn’t the price of uranium rising from Chinese storage? Another downside to the metal, as Maria Smirnova pointed out during a recent phone conversation, is that many cannot even pronounce ‘molybdenum’. So, they call it ‘moly’ for short, as if this special metal belonged to Little Richard’s (Good Golly, Miss Molly) lyrics.

According to the International Molybdenum Associations (IMOA), nearly 80 percent of the demand for moly comes from the manufacture of tools, high-speed steel, stainless steel, and low-alloy steel. Since World War I, molybdenum has become a lower-cost replacement for tungsten in hard, impact-resistant steels. It was first used as an alloying element in the production of armor plates.

Molybdenum Commodity Specialist Michael J. Magyar describes the properties and uses of molybdenum in the United States Geological Survey’s Yearbook of Minerals, “Molybdenum is a refractory metallic element primarily used as an alloying agent in cast iron. , steel and superalloys to improve hardenability, strength and toughness, and resistance to wear and corrosion.To achieve the desired metallurgical properties, molybdenum … is frequently used in combination with or added to chromium, columbium, manganese, nickel, tungsten or other metal alloys. “

The exploration of new sources of oil has led to the development of deep drilling. Very deep reservoirs are often contaminated with corrosive sulfides, brines, and carbon dioxide. Molybdenum is the low-alloy steel with the highest resistance to sulfur cracking available for use in acid wells. As service conditions deteriorate, oil companies are turning to higher moly stainless steels (with a moly content of 13 to 16 percent) to handle the unfavorable elements at those depths.

Sixty percent of moly consumption is used for stainless steels, superalloys, or low-alloy steels. An example is a popular form of stainless steel called S31600 (Type 316), which contains three to four percent Moly). This type of stainless steel was used to clad the exterior of the tallest building in the world – the Petronas Towers in Kuala Lumpur in Malaysia, Canary Wharf in London, and in many other architectural applications in coastal marine settings.

According to the IMOA, “The most corrosion-resistant stainless steels contain between 6 and 7.3% molybdenum. These grades are used for power plant condensers, offshore pipelines, and critical components in nuclear power plants, such as gas pipes. service water 6% molybdenum in 1996 Stainless steels were selected for the absorbent towers of more than twenty flue gas desulfurization scrubbers being installed in coal-fired power plants in South Korea. “

Molybdenum-based catalysts are growing. The oil industry has been using molybdenum to remove sulfur from compounds normally found in crude oil. As oil production turns to higher sulfur crude oil, more moly-based catalysts will be required. Others plan to use molybdenum to liquefy coal. It is true that this consumption is still early. But, in early February, China Oil News reported that China plans to spend $ 15 billion to build coal liquefaction plants in that country. China hopes to harness its huge coal deposits to turn them into petroleum products, using molybdenum-based catalysts.

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