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Market Tendency On Imports Of Ferro-Alloys At 16th September 2008
= Prices Of Mn, Cr & Si Ferro-Alloys Are Entering Into Period To Adjust
The market tendency by item on imports of ferro-alloys into Japan at the 16th September of 2008 is as follows ;

<> General view = Prior to the Beijing Olympic Games held in August, prices of Chinese ferro-alloys had once raged at a fever but a period to adjust these prices is now coming up. Even prices of ferro-alloys in domestic market of China are going to fall and it is also supposed that steel companies of Japan, which are the most influential customers on exports of Chinese ferro-alloys, will hold back their purchases of ferro-alloys until October. By taking a chance on the steeply risen prices of ferro-alloys in domestic market of China, traders, who kept their stocks of ferro-alloys, and producers, who hesitated to sell ferro-alloys, have now changed their position to a bearish attitude for the tightening monetary situation. Under this situation, even Australian manganese mines, which had so far taken a bullish attitude toward sales of manganese ore for China, proposed Chinese side to make a slight adjustment of the price for manganese ore to be shipped in October - December quarter of 2008, which is actually thought to roll over. In view of the fact that current production is not payable for cost, Chinese enterprises are going to decrease their production of silico-manganese. In the same case as that of silico-manganese, the production of ferro-chrome in China is being reduced. Owing to the depressed world economy, prices of Chinese ferro-alloys for exports had once taken only a bullish tone from last year but are currently facing a turning point. It is wondered whether this change of the market prices is a temporary phenomenon or not, and the matter in question depends on how to develop steel production in China for the near future.

<> Ferro-silicon = The sharply risen price of ferro-silicon has turned to fall from the end of July but, after having reached a level of US$1,750 per ton FOB China, a further fall of the price has made a pause. Price of ferro-silicon maintained a level of US$1,750 FOB throughout August and, therefore, some of the parties concerned have an opinion that price of ferro-silicon might have touched the bottom. An offer of ferro-silicon is now being made at US$1,800 per metric ton FOB China. However, there is a strong view in the market that it will be necessary to watch carefully about further movements of price for ferro-silicon, and the customers concerned have kept an attitude to hold back their purchases of ferro-silicon. In the course of time, the negotiations with electric furnace mills of Japan on Yen price of ferro-silicon for shipments in October - December quarter are scheduled to be taken place from this week. The trading companies concerned have intended to reduce their Yen price of ferro-silicon by Yen 30,000 per metric ton. However, since the exchange rate of Japanese Yen against US-Dollar has strengthened at moment, it is still opaque whether the negotiations will be settled by a reduction of Yen 30,000 per ton or not. A considerable rise of Yen 100,000 per ton as settled for shipments in July - September quarter, when the market prices were confused, is now reacting to the price to be fixed for October - December quarter. For a reference, the Yen prices of ferro-silicon to be paid by electric furnace mills for July - September quarter are in the range of Yen 250,000 - 260,000 per metric ton delivered to mills.

<> Silico-manganese = It is wondered the reason, why price of silico-manganese imported into Japan has no rise for 7 months from March of this year. In that period, US$ price of silico-manganese rather fell by US$50 per ton for the rushed sales. However, the anticipated increase of production cost has motived to let shippers maintain the price on a level of US$2,350 - 2,400 per metric ton CIF Japan This adhered price of silico-manganese is understood to have owed to a success, which steel mills of Japan have purchased in advance silico-manganese (to accumulate stocks) in spring of this year in anticipation of a rise for price of silico-manganese in the near future. In the course of time, Chinese producers of silico-manganese have faced a sharp rise (by 30 - 35%) of price for manganese ore as raw material and a raise (by 15%) of electric power fee. Under the circumstances, Chinese producers are being obliged to reduce their production of silico-manganese, which has become unprofitable for their cost. Although a further factor to push up the cost for production in October - December quarter (the risen price of manganese ore for July - September quarter is currently permeating in the market) has existed, the present situation in China is a fall of price for silico-manganese sold in domestic market. The matter, which customs-offices of China have risen from September the floor price for export of silico-manganese (to US$2,400 per ton), is an evidence, having increased cost for production of silico-manganese in China. However, the quantity of silico-manganese to be exported from China has been restricted but India, where has no duty to be imposed on export, has taken the offensive for sales of silico-manganese and, therefore, China has faced the wall to maintain the price of US$2,400 per ton for silico-manganese. For a reference, the trading companies concerned have targeted to rise Yen price of silico-manganese by Yen 15,000 per metric ton for deliveries to electric furnace mills in October - December quarter.

<> Charge chrome = The negotiations with stainless steel mills in Europe on price of South African charge chrome for shipments in October - December quarter are scheduled to be taken place soon and there is a strong view in the market that the price will be rolled over. It is rumored that South African side has still an intention to rise price of charge chrome for October - December by 10 - 20 US-Cents per lb. of Cr but a probability to settle the price by roll-over has strengthened. Indian suppliers have taken the offensive to export high carbon ferro-chrome (charge chrome) at discounted prices for Europe and the USA and their offers are 30 - 40 US-Cents per lb. lower than the bench mark price. Price of chrome ore as raw material has already turned to fall for shipments in October - December quarter and Turkey is a major country to produce high grade chrome ore but a Turkish shipper already expressed an intention to reduce their price of high grade ore by US$200 per ton for shipments in October - December quarter. Under the present situation which the world production of stainless steel is anticipated to be depressed until summer of 2009, the best way to solve price of South African charge chrome for October - December quarter is thought to roll over from that for July - September quarter.

<> Low carbon ferro-chrome = The producers of low carbon ferro-chrome in Russia and Kazakhstan informed their regular consumers in Japan of an intention to reduce price of low carbon ferro-chrome for shipments in October - December quarter. The negotiations are on the way and, according to an information, carbon 0.1% max. material is being offered at 445 - 450 US-Cents per lb. of Cr CIF Japan, which will be a reduction of 65 US-Cents per lb. compared with those settled for shipments in July - September quarter. This fall of price for low carbon ferro-chrome is supposed to have been influenced by the lowered price of approximately 400 US-Cents per lb. of Cr CIF Japan offered from Chinese side. Also, another factor, being able to reduce price of low carbon ferro-chrome, is the weakened exchange rate of Russia Ruble against US-Dollar. However, the matter in question is whether Chinese producers are able to follow a reduction of the price as proposed by these major shippers in Russia and Kazakhstan or not, and many unstable factors for Chinese producers are still seen. The cost to produce low carbon ferro-chrome in China is unexpectedly expensive and, therefore, it seems to be very difficult for Chinese side to compete with a lower price than 400 US-Cents. The parties concerned are rather interested in knowing whether major producers in Russia and Kazakhstan are still able to reduce further their price of low carbon ferro-chrome even from 2009 and afterwards or not. This is a key point to maintain their share in the market.

<> Silicon metal = It is supposed that the negotiations with aluminum alloy plants of Japan on price of Chinese silicon metal with 5.5.3 grade (for aluminum alloy industry) for shipments in October - December quarter passed its peak by the end of last week. The price settled is US$2,230 per metric ton CIF Japan, having fallen by US$20 - 30 per ton compared to those for July - September quarter. China will enter into a season of drought from October and, accordingly, the production of silicon metal in China commences to decrease on a basic tone, which is expected to bring in a tightness on supply of silicon metal. It is thought that Chinese producers of silicon metal have to face so many factors to raise the cost, including electric power fee, coke price, and so on. However, plenty stocks of silicon metal have existed in China at present and caused to precede the sales. In addition, the tightening monetary situation in China seems to have driven stockiests to a bearish attitude.

<> Ferro-vanadium = The market price of ferro-vanadium is currently fluctuating in a center of US$65 per kg. of V and the latest one is in the range of US$63 - 65 per kg. of V CIF Japan., having rectified a higher price offered at the end of August.

<> Molybdenum = Under the fundamentals which new increases on supply of molybdenum are nearly nil until 2009, prices of molybdenum have maintained the high levels. The current price of ferro-molybdenum is moving in the range of US$79.00 - 79.50 per kg. of Mo CIF Japan, having adhered to a high side.
last modified : Mon 22 Sep, 2008 [11:18]
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