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Market Tendency On Imports Of Ferro-Alloys At 15th December 2008
= In China, Prices Of Manganese Ferro-Alloys See Bright Tone
The market tendency by item on imports of ferro-alloys into Japan at the 15th December of 2008 is as follows ;

<> General view = Owing to the fact that the substantially decreased production of ferro-alloys in China has caused an effective and autonomous adjustment, prices on some of Chinese ferro-alloys have bottomed out and are going to rebound. The first case is applied to price of Chinese electrolytic manganese metal. Reflecting a tightness on supply situation of this metal, the market price of electrolytic manganese metal in China as of the 15th of December has risen by US$500 per ton to US$2,550 per metric ton FOB China in comparison with the bottom one prevailed previously. Also, because of the supplemental purchases of silico-manganese in advance of Lunar New Year to start from the 25th January of 2009 in China, the market price of silico-manganese in China has rebounded by US$100 per ton from the bottom one. An effect of the countermeasures for a crisis of financial markets as adopted by the Central Government of China (to finance CNY4 trillion = Yen 57 trillion) is supposed to have already allowed each provincial government with more expenditures of budget. One of the examples is that the Government of Yunnan Province announced a plan to purchase one million tons of base metals, which are stockpiled for one year. Therefore, it is marked to see how extent do the purchases exhibit an actual effect.

<> Ferro-silicon = In comparison with prices of manganese ferro-alloys, price of Chinese ferro-silicon has still remained on a level of US$1,100 - 1,200 per metric ton CIF Japan and a time to recover its price has been postponed. The excessive quantities of ferro-silicon stocked at warehouses in Japan and China (Tianjin) have still existed and this aspect has put a pressure on the market. Therefore, the negotiations with electric furnace mills of Japan on Yen price of ferro-silicon for shipments in January - March quarter of 2009 are still unable to foresee how to be settled and are on a delicate stage of whether Yen price of ferro-silicon is settled on an extent of the reduction as intended by the trading companies concerned or not.

<> Silico-manganese = A recovery of price for Chinese silico-manganese has been materialized with an unexpected rapidity. The domestic price of silico-manganese in China has already rebounded to CNY7,500 - 7,700 per metric ton. Accordingly, the price to export from China to Japan is now being offered at US$1,400 per metric ton CIF, having risen by US$100 per ton from that in the last case. The sales of Chinese silico-manganese to realize toward the end of this year are sporadically seen but a general tendency of price for silico-manganese is in the mood to bottom out. When spot purchases of silico-manganese are shifted to cover its actual demand, a response to the revival of this market is thought to firm up.

<> Low carbon ferro-chrome = According to an information from the parties concerned, the price of low carbon ferro-chrome (with carbon 0.1% max.) proposed by regular suppliers for shipments in January - March quarter of 2009 is on a level of 240 US-Cents per lb. of Cr CIF Japan, which is a considerable fall from that (430 - 440 US-Cents CIF) settled for shipments in the preceding quarter (October - December of 2008). The market price of low carbon ferro-chrome in Europe has collapsed to a large extent and this matter has put a substantial influence on the price for Japan. Therefore, depending on the negotiations, steel companies of Japan will still see a possibility to settle the price on a level of 230 US-Cents per lb. of Cr CIF for carbon 0.1% max. material.

<> Charge chrome = As regards how to settle price of South African charge chrome for shipments in January - March quarter of 2009, the activities to grope each other are continuing by taking into consideration of the extraordinary situation emerged in Europe. In prior to Christmas holiday, the time for negotiations has been limited and it is still not clear yet as of the 15th of December to see how to settle the price. The extraordinary aspect, which the actual volumes of regular charge chrome to be purchased by mills are restricted or nil, has caused to complicate this matter to settle the price for January - March quarter.

<> Manganese metal = In consequence of the reduced production of electrolytic manganese metal in China, the supply situation of this metal has turned to tighten and, incidentally, the purchases from Europe have come up. Accordingly, the market price of Chinese electrolytic manganese metal has rebounded by US$500 per ton from the bottom one. The price of electrolytic manganese metal offered from China for export to Japan is in the range of US$2,500 - 2,550 per metric ton FOB. The current price of this metal offered by Japanese trading companies is US$2,550 per metric ton CIF but part of offers is on a level of US$2,700 CIF, having shown a confusion. As a result of autonomous adjustment by the substantially decreased production of electrolytic manganese metal in China, the supply situation of this metal has been improved to a certain extent. Among prices of ferro-alloys and metals, the market price of Chinese electrolytic manganese metal has recovered as the earliest case but this metal is the commodity to fluctuate largely its price and, therefore, it is not allowed to have the unqualified optimism for the future.

<> Silicon metal = The negotiations with aluminum alloy plants of Japan on price of Chinese silicon metal (with 5.5.3 grade) for shipments in January - March quarter of 2009 are now being taken place. Chinese producers offered this metal at US$1,700 per metric ton CIF Japan but it is still not known yet whether the negotiations are settled on this price level or not, because the domestic price of silicon metal in China is currently on a level of US$1,500 - 1,600 per metric ton FOB. Being influenced by a serious decline of automobile production, the demand for silicon metal in Japan is anticipated to decrease to a considerable extent and actual quantity of silicon metal to import into Japan is forecasted to shrink. Under the circumstances, the negotiations as mentioned above are going on.

<> Molybdenum = Prior to Christmas holiday, the negotiations on purchases of molybdenum made the round and, consequently, molybdenum business has become sluggish. The market prices of molybdenum products have reached the bottom and price of molybdenum oxide has been now moving in the center of US$10 per lb. of Mo with up-and-down of 50 US-Cents. The definite matter, which two major producers of Codelco and Freeport-McMoRan have planned to decrease their production of molybdenum in 2009, has given a feeling of relief to the market. Codelco is anticipated to decrease their output of molybdenum in 2009 by 5 million lbs. and Freeport-McMoRan by 10 million lbs. respectively. Rio Tinto has planned to decrease their copper production in 2009 to a scale of 830,000 tons (on mine base) and Kennecott, a subsidiary of Rio Tinto, is supposed to have a possibility to decrease their production of molybdenum in 2009. However, the demand for molybdenum in 2009 is forecasted to decrease on a larger scale than a decline of molybdenum production as mentioned above and, accordingly, a factor to be anxious for molybdenum prices in 2009 has still existed, because it is not certain yet that price of molybdenum oxide has been bottomed out by US$10 per lb. of Mo. The traders concerned have a view that the average market price of molybdenum oxide in 2009 will move on a level of US$10 - 11 per lb. of Mo.

<> Ferro-vanadium = The price of ferro-vanadium in overseas markets has at last come down to US$29 per kg. of V, having fallen to a lower level than US$30, and an offer is being made at a lower price of US$28. However, in China where is one of main sources to supply vanadium, the domestic price of ferro-vanadium with V 50% grade has rebounded to CNY122,000 per metric ton of material due to spot purchases in advance of Lunar New Year.
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