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| Price Of Chinese Ferro-Silicon Has Steeply Risen From Last Week |
| = Risen To Level Of US$1,600 - 1,650 Per Ton FOB China |
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The price of ferro-silicon produced in China has steeply risen. A meeting by leading producers of ferro-silicon was held in China in last week and, after that, the price of Chinese ferro-silicon has risen further. The contents of this meeting are not known yet but, in view of the present situation faced by these Chinese producers, it is no wonder that the policy to rise the price of Chinese ferro-silicon for export, which has been felt as comparatively low, has become clear. Chinese side offered ferro-silicon on a level of US$1,600 - 1,650 per metric ton FOB China during the end of last week to the beginning of this week, having risen by US$100 per metric ton compared with that prevailed in the middle of April. For a reference, many of the trading companies concerned have anticipated a further rise of price for Chinese ferro-silicon in the near future and one of the reasons for this sharp rise of price has been pointed out by a negative intention for export of ferro-silicon from China. The current price of ferro-silicon for sales in domestic market of China has risen to CNY8,000 per metric ton delivered to consumers The background is due to the matters, which the demand for ferro-silicon from the steel industry of China has expanded and also a remarkable increase of the demand for ferro-silicon from the magnesium sector of China has been on a favorable tone since last year. Being supported by a firm tone on the automobile industry, a considerable expansion of the demand for ferro-silicon from the magnesium sector of China has put more substantial impact on ferro-silicon than that from the steel industry, because a larger unit of ferro-silicon is consumed for production of magnesium. Also, Chinese producers had once found out an advantage in export of ferro-silicon as good source to receive cash but, reflecting a tightness on supply of ferro-silicon to domestic market of China, the payment term has changed to be paid in cash and, accordingly, a merit to export ferro-silicon from China has become difficult to see. On the contrary, the business to export Chinese ferro-silicon takes 1 - 2 months to receive 100% of invoiced amount in cash after delivery ex. plant but many of the current sales of ferro-silicon to domestic market are being transacted on COD ( cash on delivery ) and, therefore, domestic sale of ferro-silicon has become more advantageous for Chinese producers. The Central Government of China has raised from the 1st January of 2008 the duty on exports of ferro-silicon to 25%. At that time, price of Chinese ferro-silicon rose by US$100 per metric ton to US$1,150 per metric ton CIF Japan. The current price of Chinese ferro-silicon has risen to US$1,650 CIF, having had a rise of US$500 per metric ton for the last 4 months. On the other hand, price of Chinese silico-manganese has made the round of its rising from the beginning of April and has been now maintained on a high level. Owing to the fact that the duty on exports of silico-manganese from China has raised from the 1st January of 2008, the price of Chinese silico-manganese at that time was US$1,900 per metric ton CIF Japan but the price as of April has risen to a level of US$2,400 - 2,450 per metric ton CIF Japan, which has had a substantial rise of US$500 per metric ton for the last 4 months in the same case as that of ferro-silicon. However, Chinese producers of ferro-silicon have strongly felt as they have delayed to rise their price of ferro-silicon in comparison with an extraordinarily risen price of silico-manganese and it is supposed that, in order to discuss on price of ferro-silicon, a meeting was held by the Chinese producers concerned as mentioned above. The consumption unit of electric power to produce one ton of ferro-silicon is estimated at 9,000 KW but that of silico-manganese is 4,500 KW. In the course of a crisis on supply of electric power emerged in China, price of silico-manganese has risen by US$500 per ton in spite of lower consumption of electric power for the production and, therefore, it seems that Chinese producers of ferro-silicon have understood as a further rise of price for ferro-silicon has delayed at present. Apart from problems of raw materials, in comparison with the volume of electric power to be consumed for production of ferro-silicon, the power volume to be consumed for production of silico-manganese is advantageous and possible to utilize by two times under the limited supply of electric power at present. In view of the environmental pollution, there is an anxiety in the market that production of ferro-silicon, causing to generate more dust, will be suspended at plants, which have conflicted with the regulations for a scale of production enforced by Chinese Government and located in the areas with a distance of 500 - 800 kilometers from Beijing, prior to the Beijing Olympic Games. The background, which Chinese suppliers have held back to offer ferro-silicon for shipments in June and afterwards, in advance of those to be shipped in July - September quarter, is due to that as mentioned above. The price of Chinese ferro-silicon contracted in February - March of this year for shipments in May - June are on a level of US$1,200 - 1,300 per metric ton CIF Japan but many of the importers concerned have felt an anxiety for the matter, which the case to review these contracts concluded at lower prices is anticipated to increase from this week. Some of Chinese producers already reduced largely the quantities of ferro-silicon for shipments to blast furnace mills of Japan in January - March quarter by means of applying to the condition of more or less of 10% on quantity. The influence of this matter has a big probability to come up to the surface on the transactions with not only blast furnace mills but also electric furnace mills contracted at Yen prices. For a reference, Japan imported 132,548 tons of ferro-silicon in January - March quarter of 2008, including 108,958 tons of Chinese product, which increased by 2.3% compared with that (129,501 tons including 98,571 tons of Chinese product) in the same quarter of 2007, and an anxiety for supply of ferro-silicon has appeared in an increase of the imports with concrete figures. |
| last modified : Wed 07 May, 2008 [11:40] |
