Executive Interviews

Asian Metal: Welcome to the interview by Asian Metal. To begin with, could you please give us a brief introduction to your company?

Frank Shaffi: My name is Frank Shaffi, and I am the CEO of FS Procurement Co., Ltd., headquartered in Luxembourg. I started my business as a freelancer in 1998 and have specialized in the metals industry since 2002. Our core business focuses on ferroalloys, special alloys and rare metals, particularly molybdenum and rhenium (KPR and APR). In recent years, we have also expanded into the copper business. We primarily source raw materials, including molybdenum oxide and ferromolybdenum, from China, Mongolia, Uzbekistan and other countries, and then process or convert them through contracted processing plants. Our annual trading volume of molybdenum oxide and ferromolybdenum typically ranges from 1,200 to 1,500 metric tons. However, in some years the volume can increase significantly. In 2026, for example, our trading volume is expected to reach approximately 2,200 metric tons. Because molybdenum is both expensive and highly volatile in price, we generally purchase and sell simultaneously to manage our market exposure. Our major customers are located in India, Europe, particularly Rotterdam and Belgium, as well as Turkey, South Korea and, more recently, China.

Asian Metal: China's supply of molybdenum concentrate has remained tight, resulting in steadily rising domestic prices. Meanwhile, mining operations in Chile have been affected by natural disasters, leading to unstable production. From your perspective, how do you assess the current global supply situation for molybdenum?

Frank Shaffi: At the beginning of 2026, major producers such as Chile experienced production declines of approximately 10% to 18% in molybdenum concentrate. As a result, global molybdenum oxide production fell by around 4% year on year. A fire at a U.S. production facility several months ago further tightened global supply. Warehouses across Europe are now almost empty, and because of the high financial risks associated with holding inventory, most traders keep stocks below 60 metric tons. Overall, global molybdenum production is estimated at around 300,000 metric tons a year. At the same time, demand has increased by approximately 18%, while supply has declined by about 4%, creating an overall supply-demand gap of roughly 22%.

Asian Metal: What demand trends have you observed from your customers?

Frank Shaffi: In my view, demand in 2026 is noticeably stronger than it was last year. Traditionally, around 80% of molybdenum has been consumed by the metallurgical industry, particularly in products such as Type 316 stainless steel and superalloys. However, several new application sectors are now expanding rapidly. First, the photovoltaic industry is becoming an increasingly important source of demand because molybdenum is used in solar panels to improve heat resistance, increasing panel efficiency by approximately 23% per square meter. Second, the semiconductor industry is using molybdenum more frequently as a substitute for gold and tantalum in electronic products. Furthermore, demand from the aerospace and satellite sectors continues to grow. This year, the number of satellite launches worldwide has doubled, while China alone has recorded an increase of around 25%, making molybdenum an essential material for high-temperature alloys. Finally, military applications and strategic stockpiling have become another important driver of demand. In response to growing geopolitical tensions, both Europe and China are building strategic reserves, creating additional demand beyond traditional industrial consumption.

Asian Metal: There is a view in the industry that molybdenum is replacing tungsten in certain applications. How practical do you think this trend is, and what proportion of the market do you believe it could eventually account for?

Frank Shaffi: I have discussed this topic with German companies that are developing new alloys. At present, molybdenum has already replaced tungsten in approximately 3% to 4% of the relevant applications, particularly in superalloys and specialty steels. This trend is continuing to gain momentum because molybdenum is significantly less expensive than tungsten or gold while offering comparable performance in certain high-temperature applications. I believe the substitution rate is likely to increase further in the coming years.

Asian Metal: China's molybdenum concentrate price is expected to reach RMB 6,000/mtu by the end of this year, equivalent to around USD 36/ pound of molybdenum in molybdenum oxide. What is your view?

Frank Shaffi: During July and August, many processing plants will undergo scheduled maintenance, so prices are likely to remain relatively stable. I expect prices to stabilize around the current European level of approximately USD 31.7-31.8/pound of molybdenum. However, beginning in September, prices are likely to resume their upward trend and could reach USD 33-35/pound by the end of the year. We saw a similar pattern between 2002 and 2005, when prices surged from around USD 2.50/pound to as high as USD 38-42/pound. Given the current structural supply-demand gap of approximately 22%, I believe there is still considerable upside potential. Personally, I have already signed contracts covering approximately 1,500 metric tons of molybdenum oxide in order to hedge market risks and maintain a certain degree of pricing influence in the domestic market.

Asian Metal: Chinese consumers often say that rising overseas prices are driving domestic prices higher. In your opinion, does China lead international molybdenum oxide prices, or does it follow them?

Frank Shaffi: I believe that both China and the United States are currently leading global price movements, whether prices are rising or falling. However, China has by far the greatest influence because its market size is approximately five times that of the United States. China is the world's largest producer of molybdenum, accounting for approximately 42% to 45% of global output, and it is also the largest consumer, representing around 50% of global demand. Other major producing countries include Chile, with around 17% to 19% of global production, the United States with 15% to 17%, Peru with 11% to 12%, and Mexico with 5% to 6%, while Armenia, Russia, Iran, Mongolia and Uzbekistan together account for approximately 8% to 9%. In addition, China's environmental protection policies periodically reduce domestic molybdenum production, which directly supports higher prices. As a result, policy changes and production cuts in China have a direct impact on global molybdenum prices, while Europe is largely a price taker, accounting for only about 17% of global consumption. At the same time, we should not overlook the importance of supply fluctuations from exporters of unroasted molybdenum concentrates, particularly Chile and Peru. Together, these two countries account for nearly 30% of global mine production, and any supply disruption in either country immediately sends a strong signal to the global market and can trigger price volatility.

Asian Metal: China has become the world's largest consumer of molybdenum. According to Chinese customs statistics, imports of molybdenum into China reached nearly 10,000 metric tons in both April and May. Do you see opportunities to cooperate with Chinese customers?

Frank Shaffi: We are able to supply approximately 300 metric tons of molybdenum oxide a month to end-users in China. Our preferred trading terms are FOB, with either 90% prepayment or payment by letter of credit, while the remaining 10% is payable after the final inspection. Shipments can reach Mediterranean ports in approximately two weeks, while delivery to China requires an additional six to seven weeks. I prefer to establish long-term supply agreements with pricing linked to Asian Metal's monthly quotations, as this provides greater stability for both parties. We are actively seeking reliable Chinese customers that can commit to long-term and consistent purchases.

Asian Metal: Thank you very much for sharing your insights with us. We wish your company every success in expanding its business with more Chinese customers this year.

Frank Shaffi: Thank you for giving me the opportunity to share our views. I hope we will have the opportunity to build long-term partnerships with more Chinese companies in the future.