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Market Tendency On Imports Of Ferro-Alloys At 30th September 2004
= Both Prices Of Si-Mn And Fe-Si For Shipments To EF Mills / Japan In Q4 Are Reduced
The market tendency by item on imports of ferro-alloys into Japan at the 30th September of 2004 is as follows ;
<> Ferro-silicon = The price on US$ base of Chinese ferro-silicon has continued to fall on a basic tone. Chinese shippers tried in summer of this year to sustain their price of ferro-silicon as a reduction of export tax rebate was spread but an expansion of the production in China caused to put a pressure on its supply situation and, consequently, price of Chinese ferro-silicon has weakened from September of this year. The current price of Chinese product is on a level of US$750 per ton CIF Japan as a fall of US$50 per ton from the higher price as once seen and has still trended to fall to US$700 CIF. As known at the China International Ferroalloys Fair " 2004 " held on the 20th to 22nd of September in Beijing, China is scheduled to produce 2,400,000 - 2,500,000 tons of ferro-silicon in 2004 as an increase of more than 240,000 tons compared to that in 2003 for an expansion of the demand for ferro-silicon from domestic market.

For a reference, Yen prices of ferro-silicon for deliveries in October - December quarter are now being negotiated with electric furnace mills in Kanto area of Japan and the prices settled are uneven but the negotiations are supposed to have been settled by a reduction of Yen 5,000 - 6,000 per tons from those for the previous quarter ( July - September ). At the time when the negotiations were started, the trading companies concerned proposed a reduction of Yen 2,000 - 3,000 per ton but, owing to a pressure by electric furnace mills and sales at discounted prices by some trading companies, an extent of the reductions has enlarged.

<> Silico-manganese = In view of an anxious factor which Chinese side has suffered from the difficulties to secure manganese ore as raw material for production of silico-manganese, the price on US$ base of Chinese silico-manganese has been still understood to keep a steady tone. However, Japan imported an excessive quantity of silico-manganese and its cargoes have been stocked in Japan. This aspect has caused to weaken an attitude toward sales of silico-manganese taken by the trading companies concerned. At the negotiations with electric furnace mills of Kanto area to settle Yen prices of silico-manganese to be delivered in October - December quarter, the trading companies concerned intended to roll over the Yen prices but, contrarily, the prices have been finally settled by reductions. An extent of these reductions is in the range of Yen 5,000 - 7,000 per ton, which was not anticipated, and this aspect is due to the hastened sales by trading companies, having suffered from an increase of their stocks. Nevertheless, price of silico-manganese offered from Chinese side has been still kept on a level of US$1,000 per ton CIF Japan but a fall of Yen prices will influence on the negotiations to settle the prices on US$ base.

<> Charge chrome = The price of South African charge chrome for shipments to Europe in October - December quarter has been settled to roll over. The matter has developed as anticipated and a basic tone to rise price of charge chrome has made a pause after an interval of six quarters. The price of South African charge chrome to be shipped in October - December quarter has rather included the factors to reduce ( the exchange rate of Rand / US$ has weakened, a higher fee of electric power for winter season is not applied for this quarter and coke price has fallen ). However, a tightness on supply of charge chrome has played the role of having rolled over. The background is that the production of stainless steel in Europe for October - December quarter is expected to be active and the stocks of ferro-chrome at European mills have become thin. The prices of South African charge chrome to be applied for this quarter seem to be 72 - 74 US-Cents per lb. delivered. High carbon ferro-chrome produced in India is being offered for Japan but consumers have held excessive stocks of ferro-chrome and, accordingly, spot sales of Indian product are so far not successful. Even if spot sales are driven, the price of high carbon ferro-chrome to be bidden by consumers is 60 US-Cents per lb. CIF Japan.

<> Low carbon ferro-chrome = DNSC of the USA held on the 20th of September a tender to sell 15,000 tons of low carbon ferro-chrome ex. stockpiles and the successful bidders were five companies, including Serov ( DDK Trading ) and Glencore International. It is informed that Serov has purchased 8,000 tons and Glencore 3,400 tons. An influence of these sales has already appeared in the US market and prices of low carbon ferro-chrome in the USA started to weaken. A 80% of the sales seems to be exported from the USA but, by taking into account of the quantity of low carbon ferro-chrome to be consumed in the USA, the sales as mentioned above will put a pressure on the supply situation. Prices of low carbon ferro-chrome in Japan have so far settled down by taking an attitude to watch carefully about further movements of the market but it is marked to see how do prices of low carbon ferro-chrome move hereafter in Europe. There is a view in the market that, in order to avoid a fall of prices for low carbon ferro-chrome, Serov and Glencore have purchased large quantities of this ferro-alloy to sustain the current prices.

<> Molybdenum oxide = Dealers are now offering molybdenum oxide at US$18.50 - 18.70 per lb. CIF Japan , having fallen to a certain extent. The consumers concerned have opposed strongly to the price of US$20 per lb. and turned to hold back their purchases of molybdenum oxide. However, a basic tone on supply and demand of molybdenum has been still maintained on a tightness and, in particular, the narrowed capacity to roast molybdenum concentrates has come up to the surface. Apart from Molymet, convertors to expand their capacity for roasting are seldom to see since several years ago. In view of the regulation for air pollution being strengthened by the Central Government of China and an efficiency of roasting, it is hardly possible to expect many things in China. When the supply and demand of molybdenum in 2005 is looked round, a shortage of the capacity to roast molybdenum concentrates will become one of the bottlenecks for its supply.

<> Ferro-vanadium = Ferro-vanadium is now being offered at US$25 - 26 per kg. in Europe, showing a further and gradual rise of the price. It is informed that ferro-vanadium has been actually contracted at US$27 per kg. in Europe, and this price is the second highest one, following US$28 recorded in May of 2004.

<> Silicon metal = The price of Chinese silicon metal with 5.5.3 grade for aluminum industry has turned to weaken. This change of the price for Chinese silicon metal has come up after the prices of this metal for shipments to Japan in October - December quarter have been settled with aluminum alloy plants at US$1,020 - 1,030 per ton CIF as a normal level ( the prices settled with major consumers are lower than US$1,000 per ton CIF Japan ), but these prices are unexpectedly lower levels. Therefore, suppliers' side has been disappointed by these settlements and hastened to sell silicon metal even at discounted prices. New offers of silicon metal are in the range of US$1,000 - 1,020 per ton CIF Japan. The negotiations to rise price of silicon metal were taken place much earlier than that in usual year but the matters, which shippers have suffered from an increase of their stocks and need to sell silicon metal to secure a certain profit, have caused to weaken price of this metal at present.

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