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|Negotiations On Prices Of Chinese Ferro-Alloys After Duties On These Exports Have Raised|
|= Negotiations On New Prices Have Been Shelved, Treatments Of Cargoes For Oct. - Nov. Shipments Are Busy|
Since the Central Government of China suddenly announced on the 27th of October to raise the duties on exports of ferro-alloys from China, it has passed about 10 days but, for lack of a flexibility which does not admit the backdating as allowed in the past cases, the tactics of negotiations surrounding how to bear a raise of these duties between suppliers and consumers is still continuing. |
At present, a focus has been brought into how to treat the cargoes, which were contracted to be shipped in October but failed in October shipment, and the trading companies concerned have a view that a substantial scale of the cargoes was left without effecting October shipment and a delay of the shipments will be inevitable. As regards the cargoes which were contracted to be shipped in October but have been carried over to shipments in November, a point in dispute is whether Japanese side bears net raise of duty on exports of bulk ferro-alloys from China ( raised by 5% to 10% ) or not.
Under the contracts as usually concluded, many cases have stipulated as changes of public duties and taxes are to be charged for buyers and force majeure is applied. When Japanese side does not agree to bear this raise of the export duty, the contracts in question will be cancelled or delayed its shipments until this dispute is settled. In the case that many cargoes have a delay of shipments, a substantial influence will be put on the supply situation of bulk ferro-alloys in Japan. However, the above-mentioned definition is theoretically applied but the reality of business has been alive in another world and, according to an example seen in the past, a power relationship on supply and demand of Chinese ferro-alloys will decide an issue of the matter, for which side does a raise of the duty charge.
The steeply risen price of Chinese ferro-siulicon emerged from May - June of this year was stimulated by an information, which the duty on export of ferro-silicon from China would be raised from July, and, even if this raise of the duty was not materialized in July, price of Chinese ferro-silicon should rise due to a tight supply of this ferro-alloy.
On the other hand, when Japanese trading companies have been selling bulk ferro-alloys from their stocks, it is difficult to specify the cargoes in question and, accordingly, it is not possible to pass on a raise of the duty to steel mills of Japan. There is a big wall to revise Yen prices of ferro-silicon and silico-manganese contracted with electric furnace mills for shipments in October - December quarter. Nevertheless, Yen prices of these two ferro-alloys contracted with mills for shipments in a single month of November will be able to rise for its cost-up.
Also, as for manganese metal which has been suddenly imposed by 15% of duty on export of this metal from China, a considerable amount of export duty is charged for Chinese producers and, among ferro-alloys and metals, many of Chinese producers or shippers will suffer seriously from a raise of this export duty.
Under the circumstances as mentioned above, at present, it is hardly possible to conclude new contracts on imports of bulk ferro-alloys from China into Japan but new prices ( on the basis of per ton CIF Japan ) offered from Chinese side are <> ferro-silicon : at US$780 and <> silico-manganese with Mn 65% min. : at US$730, both of which have risen by US$30 per ton compared with those prevailed on or before the end of October. These rises of prices for ferro-silicon and silico-manganese offered newly from Chinese side have included 5% of the export duty. Chinese manganese metal has to add 15% of the export duty to its new offer and new price comes to a higher level than US$1,500 per ton CIF Japan.
The Central Government of China decided to impose 10% of duty on exports of molybdenum products from China and, therefore, major dealers have taken a cautious attitude to watch carefully about further movements of molybdenum prices, causing to hold back new offers for molybdenum. The prices of molybdenum products quoted in a foreign metal magazine published on the end of last week were <> molybdenum oxide : at US$25.00 - 25.50 per lb. and <>ferro-molybdenum ( European product ) : at US$58.50 - 61.50 per kg., showing a tendency to rise molybdenum prices.
|last modified : Fri 10 Nov, 2006 [10:58]|