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Market Tendency On Imports Of Ferro-Alloys At 15th October 2008
= All Prices Of Chinese Ferro-Alloys For Exports Have Fallen
The market tendency by item on imports of ferro-alloys into Japan at the 15th October of 2008 is as follows ;

<> General view = All prices of Chinese ferro-alloys have fallen. Consumers, who have currently held back to purchase ferro-alloys, are expected to come in the market in November and, therefore, it is marked to see how to be settled these bottomed prices of Chinese ferro-alloys. However, under the present critical situation, which the turmoil in financial markets of the world is unable to calm down so soon, financial difficulties and disposals of stocked cargoes at discounted prices arisen from the phenomenon of steeply fallen shares prices are causing to form a spiral of depression in China. On the other hand, owing to a simple difficulty of financing, further apprehensions have come up. The Central Government of China is scheduled to enforce from the 1st January of 2009 the system to issue licenses for exports of Chinese ferro-alloys and has been currently investigating the exporters to be qualified. The companies to be allowed to export ferro-alloys under EL (export license) system are supposed to be unexpectedly restricted and 157 companies are thought to be qualified. By means of limiting a number of the qualified companies, the Central Government of China will be able to more easily control exports of ferro-alloys from China. Accordingly, it is anticipated that many of the importers concerned will be driven to change the channels to import Chinese ferro-alloys.

<> Ferro-silicon = Price of Chinese ferro-silicon is still continuing to weaken on a basic tone and has now fallen to a level of US$1,700 per metric ton CIF Japan but major producers of China are sporadically coping with this aspect by means of reducing their production of ferro-silicon. There is a view in the market that, in relation to the stocks of ferro-silicon at mills, major consumers of Japan may place their new inquiries for ferro-silicon before suppliers in November - December. Under the circumstances, price of ferro-silicon may have a big probability to move to an upward direction. Chinese side has been also placed on the same situation (an increase of stocks causes a reluctance of purchases).

<> Silico-manganese = Because of the stocks of manganese ore purchased at higher prices as raw material, the cost to produce silico-manganese in China has now turned to be entirely not payable. However, price of Chinese silico-manganese is still falling on a basic tone and a lower price than US$2,000 per metric ton CIF Japan is anticipated to be materialized sooner or later. A loss of US$500 per ton will induce to decrease production of silico-manganese in China but export of Chinese silico-manganese has been threatened with a quick growth of India, where has no duty to be imposed on export of silico-manganese. A shock of the case leaked from qualification for EL (export license) has already come up to the export market and speculative cargoes of silico-manganese will be liquidated soon. Therefore, a differential of prices in this week and next week has a possibility to enlarge and this situation has resulted in baffling importers at the start. At the negotiations with electric furnace mills to settle Yen price of silico-manganese for shipments in October - December quarter, trading companies proposed mills to rise this Yen price to a large extent (a rise of several thousand Yen) but, with regardless of this proposal, some of distributors enforced to reduce their Yen price (for T mill in Kanto area). This reduction of Yen price once made a noisiness in the market but, under the present situation, having already passed two weeks, this enforcement is thought to be a correct interpretation.

<> Charge chrome = The negotiations with stainless steel mills in Europe and Japan on price of South African charge chrome for shipments in October - December quarter have been settled by a reduction of 20 US-Cents per lb. of Cr but, in view of a possibility to reduce the price by 30 - 40 US-Cents, there is a big probability to reduce again price of South African charge chrome for shipments in January - March quarter of 2009, because a recovery on production of stainless steel in Europe will be carried over from January - March quarter of 2009 to summer of next year and afterwards.

<> Low carbon ferro-chrome = After the negotiations with steel companies of Japan on price of low carbon ferro-chrome with carbon 0.1% max. for shipments in October - December quarter were finished, price of low carbon ferro-chrome has come to a standstill but kept the weakness on a basic tone. The current price of this ferro-alloy is thought to be on a level of US$4.30 - 4.40 per lb. of Cr CIF Japan but a lower price is on a level of US$4.20 CIF. The offers of Chinese low carbon ferro-chrome at discounted prices have driven to fall price of low carbon ferro-chrome and Chinese product is now being offered at US$3.50 per lb. of Cr CIF Japan as the lowest one but, in view of its profitability, price of Chinese low carbon ferro-chrome is supposed to have a limitation to be able to reduce.

<> Silicon metal = The negotiations with aluminum alloy plants of Japan on price of silicon metal for shipments in October - December quarter were finished but, owing to the unexpectedly decreased demand for silicon metal in Japan, stocks of silicon metal have been left in China with substantial quantities. A basic tone of price for silicon metal is unable to allow a rise and the price offered from Chinese side is still falling. The price of Chinese silicon metal with 5.5.3 grade contracted with Japanese plants for shipments in October - December quarter is US$2,200 per metric ton CIF and the current price of this metal offered from China is in the range of US$2,020 - 2,030 per metric ton CIF Japan, having considerably fallen compared with the contracted one as mentioned above. The aluminum alloy industry has closely related with the automobile industry and, accordingly, the reluctance to purchase silicon metal by consumers is heavily causing to reduce stocks of this metal to a large extent.

<> Manganese metal = Price of Chinese electrolytic manganese metal is still falling gradually and the current one has come to be nominal. Therefore, trading companies have a view that, as far as a serious inquiry for this metal is placed before Chinese suppliers, electrolytic manganese metal produced in China is thought to be offered at a substantially discounted price (on a level of US$3,000 / ton CIF). The current prices of electrolytic manganese metal offered from China is on a level of US$3,500 - 3,600 per metric ton CIF Japan.

<> Molybdenum = A basic tone of prices for molybdenum products has suddenly turned to weaken. This aspect has sensitively reacted to the facts, which the demand for molybdenum in Europe has changed with an anxiety and the circumstances surrounding a whole of the molybdenum market are going to deteriorate. The current prices are US$66 - 67 per kg of Mo CIF Japan for ferro-molybdenum and US$28 per lb. of Mo CIF for molybdenum oxide respectively, both of which have fallen by 10% compared with those prevailed on the end of September.

<> Ferro-vanadium = Dealers are offering ferro-vanadium on a level of US$60 per kg. of V CIF Japan, having fallen by US$2 -3 per kg. of V compare to that on the end of September, but an extent of the fall is not so sensitive as that of molybdenum.
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last modified : Tue 21 Oct, 2008 [12:02]
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