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| Market Tendency On Imports Of Ferro-Alloys At 14th November 2008 |
| = Infirmity To Support Prices As Seen From Steep Fall Of Molybdenum Prices |
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The market tendency by item on imports of ferro-alloys into Japan at the 14th November of 2008 is as follows ; <> General view = While it goes without saying that the activities by China have put a considerable influence on prices of ferro-alloys, the Central Government of China has decided to invest Yen 57 trillion in order to prop up the economic situation in China and, therefore, a key point will be when does the demand for steel products in China revive by this countermeasure. At all events, China has held the following excessive ore stocks ; <> iron ore : 70 million tons, <> nickel ore : 10 million tons, <> manganese ore : 1.0 - 2.0 million tons and <> chrome ore : 0.70 million tons. Accordingly, it is hoped that China moves to reduce their excessive stocks of raw materials. Under the circumstances, the output of crude steel in China for October of 2008 had a decline of 17% compared with that in the same month of 2007, following the decreased production of crude steel for the previous month of September, and it is difficult to expect a recovery of steel production in China within this year. <> Ferro-silicon = In comparison with a sharp fall of price for silico-manganese, price of ferro-silicon is falling at a snail's pace but a gradual fall of the price is certainly coming up. The price of US$1,300 per metric toon CIF Japan for ferro-silicon has been normalized and a lower price than this is sporadically offered. Tokyo Steel Manufacturing held recently a tender to purchase ferro-silicon and the lowest price bidden was a lower level than US$1,200 CIF. The Yen price of ferro-silicon settled with electric furnace mills under monthly contracts was reduced by Yen 30,000 per metric ton for October delivery and again by Yen 30,000 per ton for November delivery respectively, having progressed with a substantial fall in each month, but the Yen price of ferro-silicon settled in September with electric furnace mills under quarterly contracts has been reduced by Yen 30,000 per metric ton for shipments in October - December quarter and Yen price of ferro-silicon in Japan has been moving on a stable formation. In view of a considerable fall of market price for normal steel scrap, major steel mills have been increasing the scrap quantity to be used and, in order to heat up temperature in furnace, moving to consume positively ferro-silicon. <> Silico-manganese = A fall of price for silico-manganese is still continuing and it is not possible to ascertain the bottom. Unless Chinese side suspends realization sales for financing, market price of silico-manganese is anticipated to sink in a bog within this year. An anxiety for the movements by producers and traders in China, who are suffering from a shortage of fund to pay for invoice amount of manganese ore imported by them as raw material, is thought to have been still left until the end of this year. The most efficacious specific medicine for the steel industry of China is a recovery of the domestic market but Chinese mills have been still continuing to reduce steel production and, therefore, an outlook of steel market for the future is so far not foreseeable. The market price of silico-manganese at present is US$1,450 per metric ton CIF Japan but a lower price of US$1,400 is sporadically offered (bidden by this price level at a tender held by Tokyo Steel Manufacturing and a further fall of price for silico-manganese is anticipated. Major manganese mines are implementing to restrict their shipments of manganese ore for China as raw material for production of silico-manganese but it is wondered how extent is this countermeasure effective to decrease the excessive stocks of manganese ore in China and a result of this arrangement is expected to be ascertained in 2009 and afterwards. <> Charge chrome = Most of South African producers announced to reduce their production of charge chrome and Indian producers are also going to decrease their production of high carbon ferro-chrome. Accordingly, the movements to adjust the supply of charge chrome (high carbon ferro-chrome are activating. Spot price of charge chrome in Europe is in the range of 90 - 100 US-Cents per lb. of Cr at present. Even when the spot price has fallen, the weakened exchange rates of South African Rand and Indian Rupee against US-Dollar (by 30% are enable to keep a profitability in these two countries but the sales in question are being depressed for the reduced production of stainless steel and the producers concerned have been driven to decrease their production of ferro-chrome. Since major producers of ferro-chrome in South Africa have been decreasing their production, the orderly supply of charge chrome is being materialized and these South African producers are intending to narrow as much as possible an extent of the benchmark price of charge chrome to be reduced for shipments in January - March quarter of 2009 (compared with US$1.93 per lb. of Cr settled for October - December quarter of 2008 but it is marked to see whether it is possible for producers to settle the price for next quarter on a level of US$1.50 or not. Therefore, a result of the negotiations with stainless steel mills on price of South African charge chrome for shipments in January - March quarter of 2009 scheduled to be taken place in December is waited to see. <> Molybdenum = Spot price of molybdenum oxide as of the end of October was US$23 - 24 per lb. of Mo CIF Japan but its present price, having passed two weeks, has fallen to a level of US$9.50 - 11.00 per lb. of Mo CIF by an extent of more than half. The cost price of molybdenum oxide has been said as US$10 per lb. of Mo but very high oxide price had been maintained for the last 3 years and this aspect was due to a consequence of the supports endeavored by the molybdenum industry, including molybdenum producers, but the offensive for sales of molybdenum products taken by major traders, who have enlarged their need for financing caused by a crisis of the monetary market, has resulted in falling spot price of molybdenum oxide to a nearer level to the cost price. The largest trigger for this steep fall of molybdenum prices is not negligible to be the cutback of steel production and the fundamentals of molybdenum were once said to be healthy but are supposed to be unable to oppose to a decline of the molybdenum demand. It is still not known yet whether a feeling of the fact, having fallen price of molybdenum oxide to a lower level than US$10 per lb. of Mo and approached the bottom, has come up to the market or not. The current price of ferro-molybdenum is in the range of US$24 - 26 per kg. of Mo CIF Japan. <> Manganese metal = The latest price of Chinese electrolytic manganese metal has fallen to a level of US$2,000 - 2,100 per metric ton CIF Japan and it has been viewed to be no wonder to fall price of this metal to a lower level than US$2,000. However, China is the country to be able to produce the largest quantity of electrolytic manganese metal but, as the current price is not profitable, most of Chinese producers have suspended to operate their plants and concentrated their efforts on disposals of the stocked cargoes. While it is anticipated that an adjustment of the supply position will be materialized in one of these days, a key of the time has been grasped by the steel production in China. The price of electrolytic manganese metal sold in domestic market of China has been still confused and a normal price is CNY11,000 per metric ton but a discounted price of CNY10,000 is being sporadically offered. China exported 241,000 tons of electrolytic manganese metal in January - August of 2008, having decreased by 3.7% compared with that (250,000 tons in the same period of 2007, but has still kept the constitution to rely on the exports. <> Ferro-vanadium = The companies to produce ferro-vanadium in the world have been limited and influenced by the reduced purchases of ferro-vanadium by steel mills. Reflecting a steep fall of molybdenum prices, traders are now offering ferro-vanadium at US$35 - 38 per kg. of V CIF Japan, having had a gradual fall from US$40 as of the end of October. |
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| last modified : Thu 20 Nov, 2008 [11:01] |
