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Market Tendency On Imports Of Ferro-Alloys At 15th November 2007
= Strengthened Exchange Rate Of Chinese CNY / US$ Causes Pressure To Push Up Export Costs
The market tendency by item on imports of ferro-alloys into Japan at the 15th November of 2007 is as follows ;

<> General view = In consequence of the weakened exchange rate of US-Dollar, the currencies of many countries have been influenced accordingly and the exchange rate of Chinese currency - CNY against US-Dollar has strengthened to US$1.00 : CNY7.40 - 7.45. On the other hand, the exchange rate of Japanese Yen against US-Dollar has strengthened from US$1.00 : Yen 114 to US$1.00 : Yen 111 - 112 and, therefore, it is now marked to see how extent does this strengthened exchange rate of Yen / US$ influence on Yen prices of bulk ferro-alloys to be imported into Japan and contracted with electric furnace mills for shipments in January - March quarter of 2008. The matter in question is when does the Central Government of China raise again the duties for exports of bulk ferro-alloys and this subject is strongly felt to be carried over to the next year of 2008 but has firmly existed as the factor to shake prices of Chinese ferro-alloys.

<> Ferro-silicon = Chinese ferro-silicon is still being offered at US$950 - 980 per ton CIF Japan, having remained as nearly unchanged. The problems for ferro-silicon are thought to be a further rise of ocean freight and difficulties to assign vessels. As a result of that Erdos, a major producer of ferro-silicon in China, has increased their capacity for production of ferro-silicon, an anxiety for supply situation of this ferro-alloy has disappeared and this matter has become a substantial factor to stabilize price of Chinese ferro-silicon. The negotiations with electric furnace mills on Yen price of ferro-silicon for shipment in a single month of December will be taken place soon and the trading companies concerned anticipate that the price of ferro-silicon to be offered by Chinese suppliers for December is supposed to remain unchanged.

<> Silico-manganese = The domestic price of Chinese silico-manganese has continued to keep a firmness and there is a strong view in the market that it will not take time to rise this domestic price to a level of CNY10,000 per ton delivered to steel mills. However, the domestic price of Chinese silico-manganese has risen up to CNY9,600 per ton at present and, when the price to offer for export is calculated on the basis of this CNY price, new price on US$ base to offer for Japan comes to US$1,450 per ton FOB China, including US$70 per ton of transportation charges to cover distance from plant to shipping port and 10% of the duty for export of Chinese silico-manganese. Therefore, the price on CIF Japan base becomes a higher level than US$1,480 per ton and Chinese silico-manganese was already offered at US$1,500 per ton CIF Japan. On the other hand, the trading companies concerned have intended to rise Yen price of silico-manganese by more than Yen 10,000 per ton for cargoes to be contracted for shipment in a single month of December. Nevertheless, more serious matter for consumers is a shortage of actual cargoes of high grade silico-manganese with Si 72%. A major producer of high grade silico-manganese in China ( Longlishe ) has given up to produce high grade silico-manganese because of the difficulties to secure high grade manganese ore as raw material for its very high price, having risen to US$9.00 per Mn 1%, and now inclined to attach an importance to production of normal grade silico-manganese with 65%. Therefore, it is hard to expect the supply of high grade silico-manganese from China. On the other hand, Ukrainian producers are asking for a higher price of high grade silico-manganese and, as a matter of fact, offered this ferro-alloy on a level of US$1,700 - 1,800 per ton CIF Japan ( some offer is US$1,900 CIF ). In view of the fact that 80,000 - 100,000 tons per annum of high grade silico-manganese are demanded in Japan, it seems to be inevitable to chase after even a higher price of this grade ferro-alloy.

<> Charge chrome = The negotiations with stainless steel mills in Japan on price of South African charge chrome for shipments in October - December quarter had again a marathon and the price for this quarter has been settled by rolling over from that for the preceding quarter of July - September. Accordingly, the benchmark price of South African charge chrome for October - December quarter has remained on 108 US-Cents per lb. CIF. By means of having emphasized that prices of stainless steel products were not payable for sales in July - September quarter and the production of stainless steel in the quarter had to be decreased, stainless steel mills in Europe and Far East were successful in having rolled over the price for this quarter through their persistent negotiations with South African producers. However, there is a strong impression in the market that the matter in question has been carried over to the negotiations on price of South African charge chrome for shipments in January - March quarter of 2008, because South African producers of ferro-chrome already started to exhibit their stance, which intends to rise price of charge chrome to 130 US-Cents per lb. as the minimum for January - March quarter of 2008. An opinion to turn stainless steel production to a basic tone to recover from January - March quarter of 2008 has been spread over the market and a signal of this recovery is appearing on nickel price. Spot price of high grade high carbon ferro-chrome in Europe has risen to a level of 160 - 167 US-Cents per lb. and a differential of prices between high grade high carbon ferro-chrome and charge chrome is enlarging further. Also, the projects to increase the capacity for production of ferro-chrome are nearly nothing to see in 2008 and, therefore, another anxiety for ferro-chrome is that the capacity to supply this ferro-alloy has expanded to the maximum at present.

<> Manganese metal = At the stage which price of Chinese electrolytic manganese metal has fallen to a lower level than US$3,000 per ton CIF Japan, the market has taken an attitude to watch carefully about further movements of price for this metal but the circumstances surrounding Chinese electrolytic manganese metal are still unable to turn to a favorable tone. In addition to the matter which steel companies of Japan are not interested in new purchases of electrolytic manganese metal, there is another influence on the market that these steel companies are shifting raw material to use from electrolytic manganese metal to super low carbon ferro-manganese. At present, it is possible for Japanese consumers to purchase low carbon ferro-manganese from China and South Korea at US$2,350 - 2,400 per ton CIF Japan and the merit per Mn 1% is 50 / 50 for both of electrolytic manganese metal and super low carbon ferro-manganese. Namely, the current price of electrolytic manganese metal is equivalent to US$30.30 per Mn 1% and, on the other hand, that of low carbon ferro-manganese is equivalent to US$31.33 per Mn 1%.. The yield for its usage is advantageous to low carbon ferro-manganese and, as far as the current price of low carbon ferro-manganese is obtainable, the case to use super low carbon ferro-manganese is able to see a merit. Both factors, which nickel price has weakened and the offensive to use low carbon ferro-manganese has been taken by steel mills, have caused to fall price of Chinese electrolytic manganese metal.

<> Silicon metal = The market of silicon metal is under the mixed circumstances, which the speculative cargoes of silicon metal stocked by Chinese producers or shippers have put a pressure on their financing and the matter to decrease production of silicon metal in winter season has caused a bullish factor for sales, and the current price of Chinese silicon metal with 5.5.3 grade offered for export is US$1,500 per ton CIF Japan ( the prices of US$1,300 - 1,400 CIF as mentioned in the TEX Report No.9359 dated November 1, 2007 were not correct ), showing a gradual fall. An offer for Chinese silicon metal was made at US$1,480 per ton CIF Japan, having fallen to a lower level than US$1,500 CIF. Chinese side is eagerly endeavoring to maintain price of silicon metal but a key point to influence on the price is a forecast of rainfall anticipated for winter time of this year. If rainfall comes in order, a feeling to foresee a weak tone of the price will come up. In the contrary case, price of Chinese silicon metal will have a factor to turn to rise.

<> Molybdenum = In consequence of that the Central Government of China has enforced the regulations for exports of molybdenum products ( adopted the system to allocate exportable quantities ), the exports of molybdenum products from China in July - September quarter of 2007 decreased to a considerable extent. Namely, China exported 13.3 million lbs. of molybdenum in molybdenum products in July - September quarter, having decreased by 30% compared with the pace in the first half ( January - June ) of 2007. The production of molybdenum in the western world is hard to increase and, in addition to this aspect, it is anticipated that China will also export molybdenum products on a low level in October - December quarter of 2007. Accordingly, the factor to decrease exports of molybdenum products from China is not negligible. Dealers are now offering ferro-molybdenum on a level of US$74 per kg. CIF Japan, having kept a firm tone.
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last modified : Wed 21 Nov, 2007 [10:42]
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