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Market Tendency On Imports Of Ferro-Alloys At 31st July 2008
= Sharp Fall Of Nickel Price Causes Chain Reaction To Lower Price Of Ferro-Chrome
The market tendency by item on imports of ferro-alloys into Japan at the 31st July of 2008 is as follows ;

<> General view = A considerable fall of LME nickel prices has started from the second half of last week and, therefore, it is strongly interested in seeing its influence on price of ferro-chrome. There is no direct causal relation between nickel and chrome but both commodities are main raw materials for production of stainless steel and the relationship among nickel and chrome is not so shallow. In anticipation of a further fall of nickel price, if the production and sales of stainless steel in the world are shrunk, the supply situation of ferro-chrome will be certainly influenced by the fact to reduce production of stainless steel. In view of the reality which nickel price has continued to fall, it is deeply interested in knowing about how extent does this fall of nickel price influence on price of ferro-chrome. Spot price of ferro-chrome mainly in the USA has clearly turned to fall. Following a fall of price for ferro-chrome in China, Indian high carbon ferro-chrome is now being offered at discounted prices and, at that time, the subject to rise price of regular charge chrome for shipments in October - December quarter is already disappearing.

<> Ferro-silicon = In order to prevent a further fall of price for ferro-silicon and to maintain the floor price (targeted to be US$1,900 per metric ton FOB China) for export, 20 major producers of ferro-silicon in China have agreed each other to reduce their production of ferro-silicon. This is the first case in China, having set up the floor price, and Chinese real ability is now being examined. On the other hand, the trading companies concerned have held the influential power on Chinese ferro-silicon and, therefore, a reaction to this floor price by them has been marked at the same time. Under the circumstances, the reality has already commenced to sell Chinese ferro-silicon at discounted prices and the market price of ferro-silicon has fallen to a level of US$1,750 per metric ton CIF Japan. The monetary situation in China has more tightened at present and, in view of the constitution for production of ferro-silicin in China (there are so many small and medium companies to produce ferro-silicon), it is no wonder that dealers are in a hurry to dispose of their stocked cargoes of ferro-silicon. The cost to produce ferro-silicon in China is said to be CNY7,000 per ton and, from a cost point of view, there is still a margin to be able to export ferro-silicon from China.

<> Silico-manganese = Price of silico-manganese is on a basic tone to rise gradually. The contracts on imports of Chinese silico-manganese into Japan for shipments in July - September quarter have already concluded and, as the Beijing Olympic Games are coming soon, new business of silico-manganese has become quiet. Some of Chinese shippers, having had a foresight of this transaction, once offered in June silico-manganese at a higher price of US$2,500 per metric ton CIF Japan. At that time, an offer was made at a lower price than US$2,300 per metric ton CIF, having caused a trouble in the market, but, in the course of time, Chinese silico-manganese is currently being offered on a level of US$2,450 - 2,500 per metric ton CIF Japan and a feeling of disorder on price of silico-manganese is going to disappear. The real market price of silico-manganese is rising gradually and this aspect of price for silico-manganese is being recognized by the parties concerned. The reason is that price of manganese ore as raw material has risen to a substantial extent and the cost for raw material is increasing by approximately US$400 per ton.

<> Charge chrome = Reflecting a fall of domestic price in China for high carbon ferro-chrome ( charge chrome ), spot price of this ferro-alloy has turned to fall. The market price of charge chrome with Cr 50% in China is 185 US-Cents per lb. of Cr at present and, referring to this price in China, Indian high carbon ferro-chrome is now in a hurry to sell by a further discount of 10 - 20 US-Cents per lb. of Cr. These prices are lower than the benchmark prices of South African charge chrome (213 US-Cents per lb. of Cr on CIF base for Japan and US$205 US-Cents on delivered and duty paid base for Europe) settled for July - September quarter. Reflecting the depressed production of stainless steel in the USA, the US market price of high carbon ferro-chrome has turned to fall. In view of the fact that spot price of high carbon ferro-chrome (charge chrome) has been stabilized on a lower level than the benchmark prices, South African producers have intended to rise again price of charge chrome for shipments in October - December quarter but this intention will be killed by a change of the market price as mentioned above. At the same time, as of this moment, an argument to rise price of regular charge chrome for October - December quarter is going to disappear.

<> Low carbon ferro-chrome = The price of regular low carbon ferro-chrome with carbon 0.1% max. for shipments in July - September quarter has been settled on a level of 510 - 515 US-Cents per lb. of Cr CIF Japan, having remained unchanged, but Chinese low carbon ferro-chrome (with Cr 60% min. and carbon 0.1% max.) is being offered at 400 US-Cents per lb. of Cr CIF Japan on spot business base and, therefore, spot transaction of low carbon ferro-chrome (including Russian product) has been influenced by this very lowered price offered from China, because spot cargoes of low carbon ferro-chrome are being offered at a lower price than 500 US-Cents per lb. of Cr CIF Japan for carbon 0.1% max. material.

<> Manganese metal = In view of many inquiries for small lots of electrolytic manganese metal, Chinese producers of this metal have suddenly turned to take a bullish attitude toward sales and offered electrolytic manganese metal at US$4,000 per metric ton CIF Japan with a certain recovery. The current price of Chinese electrolytic manganese metal has risen to a level of US$4,200 - 4,300 per metric ton CIF Japan. Major steel companies of Japan have held back to purchase Chinese electrolytic manganese metal for a long period and new inquiries for this metal are now coming up again but it is not clear yet up to when does this aspect continue. However, the current price of Chinese electrolytic manganese metal is coming down to a level to be not payable for production cost and the structure to decrease production of this metal set up by Chinese producers is useful to improve the supply situation of Chinese electrolytic manganese metal.

<> Silicon metal = The market price of silicon metal is turning to weaken on a basic tone. Domestic price of silicon metal in China has already fallen by CNY200 per ton to CNY14,900 per metric ton. The price of Chinese silicon metal for export is still being offered at US$2,400 per metric ton CIF Japan because of higher cost but anticipated to have to reduce the price for export sooner or later. It is still difficult to secure electrode and oil coke, and these purchases are required to be paid by cash. Under the circumstances, the four major bases to produce silicon metal in China, consisting of Guizhou province, Yunnan province, Hunan province and Fujian province, have had an enough rainfall to generate hydroelectric power and are now receiving the increased supply of electric power. The unprofitable production of silicon metal in China has been attacked by a tightness of monetary situation. None of Chinese producers is able to have a margin to stock silicon metal for their account and to await a recovery of price for silicon metal.

<> Ferro-vanadium = The market price of ferro-vanadium has still inclined to fall gradually. Dealers are offering ferro-vanadium at US$57 - 61 per kg. of V CIF Japan. Price of ferro-vanadium had once risen to a higher level of US$87 per kg. of V CIF in May of this year but the current price of this ferro-ally has returned to a level of US$59 - 64 per kg. of V CIF Japan, having prevailed in April in advance of a steep rise of price started from May. Domestic price of ferro-vanadium in China at present has improved somewhat but is a small recovery and will be not possible to become a factor to push up the current price of ferro-vanadium in Europe.

<> Molybdenum = Since summer vacation has come, molybdenum business has become very slow. The current price of ferro-molybdenum is US$79 - 80 per kg. of Mo CIF Japan, having remained unchanged, and molybdenum oxide is still being offered at US$33.50 per lb. of Mo CIF Japan, having maintained the same level.
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