BaseMetals.com :: LME Group - LME molybdenum contract will give market "greater depth and transparency"

London, 09 June 2010 - Molybdenum futures, which were introduced on the London Metal Exchange (LME) in February, will give the market "greater depth and transparency", Antofagasta Chairman Jean-Paul Luksic said on Wednesday.

The London Metal Exchange began trading molybdenum and cobalt futures on February 22, the world's first exchange-traded minor metal contracts.

"This should give the molybdenum market greater depth and transparency over time," Luksic said at the group's AGM.

His comments reinforced Antofagasta's support for the LME contract after CEO Marcelo Awad said in March molybdenum futures would bring transparency, liquidity and hedging opportunities to the market.

Business in molybdenum has been slow so far especially when compared with the cobalt contract, which has picked up faster than expected.

Trading volumes fell to 28 six-tonne lots in May from 80 lots in March - the first full month of trading - while market open interest eased to 35 lots from a peak of 39 lots in May. By contrast, cobalt recorded 893 traded lots last month, up 87 percent on the month, with open interest at 364 lots.

Meanwhile, molybdenum prices were around contract lows on the LME on Wednesday, with cash at $29,200/30,200 per tonne and three months at $29,500/30,500. LME values have eased in line with the physical spot market, which is around its lowest since early January.

(Additional reporting by Martin Hayes. Editing by Mark Shaw)

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