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Market Tendency On Imports Of Ferro-Alloys At 14th December 2007
= Anxious Supplies Of Ores As Raw Materials Multiply To Rise Prices Of Ferro-Alloys
The market tendency by item on imports of ferro-alloys into Japan at the 14th December of 2007 is as follows ;

<> General view = The supply of manganese ore as raw material in 2008 has been placed on an anxious phase. Therefore, the structure to supply manganese ferro-alloys for Japan based on China is multiplying a feeling of its anxiety. The reason is that, while the prices of manganese ore to be contracted with Chinese customers for shipments in January - March quarter of 2008 are going to be settled, these prices for shipments in the next quarter of April - June are also anticipated to be inevitable to rise further.

<> Ferro-silicon = A view, which the Central Government of China may raise again the duty ( 15% at present ) on exports of ferro-silicon from China, is being spread over the market. Also, since winter drought has come, actual cargoes of Chinese ferro-sailicon to be exported are tightening. Price of ferro-silicon offered from China is on a level of US$1,000 per ton CIF Japan, having remained unchanged with a bullish tone.

<> Silico-manganese = An anxiety for exports of manganese ferro-alloys produced in China has shifted to the matter of from when does the Central Government of China regulate the quantities to be allocated for exports rather than a time to raise again the export duties. This sort of sign is so far not seen in a concrete form but the most essential subject in 2008 for the parties concerned is the quantities of Chinese manganese ferro-alloys to be allocated for exports in 2008. The current price of Chinese silico-manganese is in the range of US$1,550 - 1,600 per ton CIF Japan. Some of the trading companies concerned said that they are possible to book Chinese silico-manganese at US$1,550 CIF, but a trend of price for silico-manganese is to be upward. The price of Chinese high grade silico-manganese with Mn 72% has risen to US$1,800 per ton CIF Japan. The actual cargoes of this grade silico-manganese are hard to secure as required and, in view of this aspect, some of electric furnace mills in Kanto area have shifted the kind of silico-manganese to be used by them from high grade material with Mn 72% to normal grade material with Mn 65% . The mills to take the same attitude for usage of silico-manganese are supposed to appear sooner or later.

<> Low carbon ferro-chrome = A time to take place the negotiations with regular consumers on prices of low carbon ferro-chrome for shipments in January - March quarter of 2008 has come. Producers of this ferro-alloy have adopted the policy to rise their prices of low carbon ferro-chrome step by step and are now working to rise price of carbon 0.1% max. material to a level of 215 - 220 US-Cents per lb. CIF Japan for January - March quarter of 2008. For a reference, the price of low carbon ferro-chrome with carbon 0.1% settled for shipments in October - December quarter of 2007 was in the rage of 180 - 185 US-Cents per lb. CIF Japan and, accordingly, the prices aimed to be settled for January - March quarter as mentioned above are to rise by 35 US-Cents. However, spot price of low carbon ferro-chrome already sold in Europe has been informed as 240 - 250 US-Cents per lb., reflecting a tighter situation of the supply. As regards price of high carbon ferro-chrome as raw material for production of low carbon ferro-chrome, South African producers have intended to rise price of charge chrome ( high carbon ferro-chrome ) by 30 US-Cents per lb. at least for shipments in January - March quarter of 2008 and, therefore, price of low carbon ferro-chrome will move partially in linkage with fluctuation of price for high carbon ferro-chrome.

<> Silicon metal = Price of Chinese silicon metal with 5.5.3 grade for aluminum industry once fumbled in November but, when the negotiations with aluminum alloy plants of Japan on price of this metal for shipments in January - March quarter of 2008 started, it was known that actual cargoes of Chinese silicon metal are unexpectedly scarce. Chinese shippers are now offering this grade of silicon metal at US$1,690 - 1,710 per ton FOB China, corresponding to a higher price than US$1,700 on CIF Japan base. The price of US$1,700 CIF was the highest one in the past years. In view of the fact that Chinese silicon metal was sold at a lower price than US$1,500 per ton CIF Japan in November of this year, price of Chinese silicon metal has rebounded in an unexpectedly early time. The background is that China has been exporting silicon metal on a favorable tone.

<> Manganese metal = Since two major steel companies in Japan have been reluctant to purchase electrolytic manganese metal produced in China, business on this metal has come to be dull. This aspect has been laid down on the basement as a potential bearish factor. Also, price of nickel-contained pig iron, as a rival material to manganese metal, has weakened for a fall of LME nickel prices. Therefore, Chinese shippers are now offering electrolytic manganese metal at US$2,800 per ton CIF Japan, having come down to a lower level. However, reflecting a tendency to be decreasing production of electrolytic manganese metal in China, a necessity to import manganese ore into China is disappearing from the market. The cost to produce electrolytic manganese metal on the basis of manganese ore mined at manganese mines of China has differed from that based on imported manganese ore and is thought to be still payable without a loss.

<> Molybdenum = It was known that Codelco, a major producer of molybdenum in the world, is scheduled to maintain a basic tone to decrease their production of molybdenum in 2008 ( by more than 10% compared with the output in 2007 ) and, together with a reduction of the quota for exports of Chinese molybdenum products in 2008 ( to be decreased by 15% compared to that in 2007 ), the supply situation of molybdenum in 2008 is anticipated to tighten. This basic tone on supply of molybdenum in 2008 will remain unchanged from that seen in the second half of 2007. Codelco is forecasted to decrease their production of molybdenum in 2008 by 5 - 10 million lbs. compared with that in the preceding year of 2007 and this considerable decrease of molybdenum production at Codelco in 2008 will be inevitable to put a substantial impact on the market. However, while the Central Government of China has decided the quantities of molybdenum products allocated for exports in 2008 ( 26,300 tons on Mo content base ), the quota for each of the appointed 32 exporters and producers is not notified yet. Therefore, molybdenum producers in China have faced the difficulties to proceed their negotiations with customers on exports of molybdenum products in 2008. For a reference, molybdenum prices have maintained high levels and the current prices offered from China are US$32.50 per lb. CIF Japan for molybdenum oxide and US$74.00 - 74.50 per kg. CIF Japan for ferro-molybdenum. Both prices have fallen to a small extent in comparison with those in last week.

<> Ferro-vanadium = Prior to Christmas, negotiations on ferro-vanadium are unable to surge and ferro-vandium is now being offered at US$36.00 per kg. CIF Japan with a fall of about US$1.00 per kg.
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