|The TEX Report Topics < Ferro Alloys >|
|HOME >> Topics List >> April, 2009 >> 01 (Wed)|
|Market Tendency On Imports Of Ferro-Alloys At 31st March 2009|
|= Reflecting Difficulties To Expand Domestic Demand In China, Market Prices Have Weakened, Imports Increased|
The market tendency by item on imports of ferro-alloys into Japan at the 31st March of 2009 is as follows ;|
<> General view = The subject to reduce the duties imposed on exports of Chinese ferro-alloys has become an urgent need. According to an anticipation by China Ferro-Alloys Producers Association, in consequence of that the Association negotiated with the Central Government of China, a reduction of these export duties will be materialized in the second half of 2009. These higher duties (20 - 25%) imposed on exports of Chinese ferro-alloys in comparison with the world standard have to be reviewed and revised, and these actions are a matter of urgent necessity. However, under the present situation which the demand for ferro-alloys in overseas markets has shrunk to an extraordinary extent, a reduction of these export duties will cause only a minus effect to fall prices of ferro-alloys. In June of 2007 and January of 2008 when Chinese Government had raised the export duties, prices of Chinese ferro-alloys for exports had risen steeply but, in this time, the circumstances will show a contrary aspect.
<> Ferro-silicon = On the contrary to manganese and chrome based ferro-alloys which have to import raw materials from overseas sources, it is not necessary for Chinese producers to import raw material from overseas countries for production of ferro-silicon and Chinese ferro-silicon has the advantage to be competitive for sales but, reflecting the depressed mood, price of ferro-silicon is still falling gradually. Japanese side has held a negative intention to purchase ferro-silicon but Chinese side is offering ferro-silicon at US$1,100 per metric ton CIF Japan as fallen by US$50 per ton from that in the last time. The negotiations with electric furnace mills in Japan on Yen price of ferro-silicon for shipments in April - June quarter of 2009 are scheduled to be taken place soon but it is not possible to expect that Yen price of ferro-silicon is able to be settled within a certain belt as seen in the past cases, because an attitude to purchase ferro-silicon taken by electric furnace mills has differed from that for January - March quarter and has turned to an entire severity. Therefore, Yen price of ferro-silicon to be finally settled is supposed to have a wide range of the up-and-down depending on consumers.
<> Silico-manganese = According to an information from China, the matter to reduce the duties on exports of Chinese ferro-alloys is within hail but, originally, these export duties are extraordinarily high and it has been viewed that, when prices of ferro-alloys fall considerably, it will be inevitable to adjust the export duties. However, its concrete rates are not clear yet and a time to reduce these export duties has been anticipated to be from the second half of 2009. A too advanced information has a possibility to induce to fall prices of ferro-alloys and may cause factors to weaken the market. It has passed two months after Lunar New Year in China was over and, because of the inner situation in China which has seen a lack of the surge as once arisen, Chinese side is now offering silico-manganese at US$1,300 per metric ton CIF Japan, having fallen by US$50 per ton from that in the last time.
<> Charge chrome = The negotiations with South African producers on price of charge chrome for shipments in April - June quarter have been carried over to April but the circumstances surrounding chrome are slow to see a sign of improvement. Since the financial year in India has been closed on the 31st March of 2009, the race to sell high carbon ferro-chrome at discounted prices in China has tentatively come to an end. The offensive to sell Indian high carbon ferro-chrome at discounted prices has made a pause as the cargoes for sales have turned to become scarce and, consequently, market price of high carbon ferro-chrome is expected to return to a level of 60 US-cents per lb. of Cr. However, an aftereffect of the race to sell high carbon ferro-chrome at discounted prices in China as arisen in February - March of this year has become substantial. The benchmark price of South African charge chrome for April - June quarter has been settled by a considerable reduction of 65% and this large reduction has resulted in breaking down a feeling of the expectation to bottom out by this benchmark price.
<> Silicon metal = As far as export of silicon metal for Japan is concerned, Chinese producers of silicon metal are supposed to have been shut out in all directions. The demand for Chinese silicon metal with 5.5.3 grade to be used for production of secondary aluminum alloys in Japan has decreased to an extraordinary extent from November of last year and, in addition to this negative factor, the demand for Chinese silicon metal with 126.96.36.199 grade (or 188.8.131.52 grade) to be used in chemical industry of Japan has declined to a large extent as Japanese consumers have been implementing to reduce their stocks of silicon metal. Therefore, a differential of prices between aluminum grade and chemical grade is in the direction to shrink. Chinese side is offering silicon metal with 5.5.3 grade at US$1,600 per metric ton CIF Japan, having fallen by US$50 per ton from that at a previous time. For a reference, the output of secondary aluminum alloys in Japan for February of 2009 came to 33,946 tons, which had a remarkable decrease of 65% compared with that (93,658 tons) in the same month of 2008, and aluminum alloy plants in Japan have been driven to operate at 30 - 40% of their nominal capacity. Also, in the same case as that of secondary aluminum alloys, the consumption of silicon metal in Japan has come down to a lower level than 2,000 tons per month, having decreased by 70% compared to that consumed in a peak.
<> Manganese metal = The Ministry of Environmental Affairs in China has continued to strengthen the regulations for environmental pollution in the triangle zone, where is a main base to produce electrolytic manganese metal in China, and, in addition to this negative aspect, the demand for this metal from domestic market of China has been depressed. Consequently, the operation rates at Chinese producers have been enforced to maintain on a low level. Price of manganese carbonate (with Mn 16.5%) as raw material for production of electrolytic manganese metal has fallen to US$95 per ton of material, by which it is supposed to bottom out. The temporary reduction of electric power fee terminated on the 15th of March and, accordingly, the cost to produce electrolytic manganese metal in China is estimated to have raised by US$35 per ton. The quantity of Chinese electrolytic manganese metal imported into Japan and to pass through customs on the 1st of April is marked but, in view of the accumulated stocks of this metal at steel mills of Japan, it will be difficult to expect a surge of the imports. Chinese shippers are prepared to offer electrolytic manganese metal at US$2,400 per metric ton FOB (with allowance of up-and-down of US$30 per ton) but the latest price of Chinese electrolytic manganese metal offered to Japanese trading companies is US$2,400 per metric ton CIF.
<> Molybdenum = Reflecting a depression of steel market, the projects to develop newly molybdenum mines are in the direction to postpone successively and, even in the molybdenum projects of the USA, the Mount Hope mine in Nevada State has deferred its completion by more than 6 months, following a postponement of the resumption at the Climax open-pit mine in Colorado State. Most of the molybdenum projects which have decided to defer to develop, are primary molybdenum mines and, from a view point of its production cost, primary mines have a handicap to be more expensive than that at by-product mines. These postponements of the molybdenum projects will put a substantial influence on supply situation of molybdenum from 2010 and afterwards, but the current price of molybdenum oxide has at last fallen to a level of US$8 per lb. of Mo. It was once expected that price of molybdenum oxide would bottom out by US$10, but this expectation was unable to materialize and the reality, having decreased requirements of molybdenum, has conducted the market. For a reference, market price of ferro-molybdenum at present is US$20 per kg. of Mo CIF Japan.
<> Ferro-vanadium = Even a basic tone to reduce vanadium production as implemented by producers is unable to sustain vanadium prices and ferro-vanadium is now being offered at US$22 - 23 per kg. of V CIF Japan , having fallen further.
|last modified : Mon 06 Apr, 2009 [10:34]|