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| HOME >> Topics List >> November, 2008 >> 12 (Wed) |
| Price Of Chinese Silico-Manganese Still Continues To Fall On Basic Tone |
| = Because Of Financing Difficulties, Offer Is Being Made At Discounted Price Of US$1,450 / Ton CIF Japan. |
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The boom price of Chinese silico-manganese is unable to foresee. The current price of Chinese product is US$1,450 per metric ton CIF Japan but a lower price of US$1,400 CIF is sporadically offered and a probability to fall further the price on a basic tone is supposed to exist. The background is due to the urgent circumstances of financing difficulties at producers and traders in China. For a reference, the price of Chinese silico-manganese at the end of October was US$1,750 per metric ton CIF Japan. Chinese producers of manganese ferro-alloys have concluded their contracts on imports of manganese ore with payment term of 90 day usance in many cases. The cargoes of manganese ore arrived in China during August to September of 2008 are thought to be now on due date to pay invoice amount and China imported 906,000 tons of manganese ore in July (at US$469 per ton on average) and 605,000 tons in August (at US$548 on average). Particularly, the quantity of manganese ore imported into China in July was the largest one in its history. In order to cope with the fact that current price of silico-manganese has fallen to a lower level than its payable line, Chinese producers have been reducing their production of silico-manganese and, in some areas, their operation rate has come down to a very low level of 10 - 20%. The current market situation, which price of Chinese silico-manganese is falling to the nearest line to US$1,000 per ton to be not payable for its production cost, is promoting Chinese producers to perform a considerable reduction on production of silico-manganese. Another reason, why part of producers and traders in China are in a hurry to dispose of their stocks of silico-manganese at discounted prices with regardless of its profitability, is the system to qualify exporters scheduled to be enforced from the 1st January of 2009 by the Central Government of China. Unless a Chinese company is qualified as a suitable exporter through investigation, this company is forced to withdraw from exports of ferro-alloys and, therefore, Chinese producers and traders are in a hurry to dispose of their stocked cargoes of silico-manganese for realization. A time to recover price of Chinese silico-manganese will be concentrated on the three points of (1) reflecting a revival of steel production in China (it is unlikely to see a recovery of the production in October - December quarter of 2008) , domestic price of silico-manganese is expected to turn to improve., (2) the enforcement of regulations for exports of ferro-alloys from January of 2009 will enable to restore order., and (3) steel mills of Japan have still continued the structure to hold back from purchase of silico-manganese but are anticipated to return to the market (it seems to be difficult to resume the purchase in January - March quarter of 2009). However, the present aspect is still unable to foresee an improvement of the market for silico-manganese. |
| last modified : Mon 17 Nov, 2008 [10:23] |
