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Market Tendency On Imports Of Ferro-Alloys At 30th October 2009
= Electricity Fees Are Moving To Raise In Main Bases / China To Produce Ferro-Alloys
The market tendency by item on imports of ferro-alloys into Japan at the 30th October of 2009 is as follows ;

<> General view = The output of crude steel in China decreased in September but, on the other hand, China has still continued to produce more ferro-alloys. Owing to the facts that an increase in production of ferro-alloys in China has put a pressure on the market and domestic prices of steel products in China have fallen, Chinese consumers have remarkably held back to purchase ferro-alloys. In spite of the potential factors to push up production cost, domestic prices of such bulk ferro-alloys as ferro-silicon and silico-manganese in China for October have still maintained to remain unchanged. However, at present, electricity fees (mainly fees for accommodation) are moving to raise in such districts as Ningxia Hui Aut. Region, Qinghai Province, and so on, where are main bases in China to produce ferro-alloys. When these electricity fees are raised, production cost is estimated to increase by more than US$100 per ton and, form this point of view, Chinese suppliers have changed their mind to hold back new offers for ferro-silicon.

<> Ferro-silicon = After the National Day in China was over, domestic price of ferro-silicon could have generally kept to remain unchanged but the further strengthened exchange rate of Japanese Yen against US-Dollar has caused a negative mood for purchases of ferro-silicon by Japanese customers. However, in such silicon lands as Ningxia Hui Aut. Region, and so on, electricity fees are moving to raise and, therefore, some of Chinese shippers are holding back to make new offers for ferro-silicon. The price of Chinese ferro-silicon for export has been so far on a weak tone but it is now marked whether this bearish price for export may see a turning point or not. If a raise of electricity fees could have been materialized, price of Chinese ferro-silicon for export is on a level of US$1,120 - 1,150 per metric ton FOB at present but will supposedly rise to a level of US$1,200 per ton FOB.

<> Silico-manganese = Owing to the fact that the offensive taken by manganese mines in overseas countries to rise price of manganese ore as raw material for production of silico-manganese has been stabilized in this year, the cost to produce silico-manganese in October - December quarter is thought to be inevitable for producers to raise. Therefore, it is now questioned how do Chinese producers adopt a policy for pricing of silico-manganese to be exported. However, the real price of Chinese silico-manganese to be possible to export is US$1,350 - 1,400 per metric ton FOB China, having remained unchanged, Indian silico-manganese is being offered at US$1,350 per metric ton CIF Japan but it has been felt in the market that price of Chinese product seems to be on a similar level to that of Indian product, because Indian price has risen somewhat and Chinese price has fallen slightly.

<> Charge chrome = The benchmark price of South African charge chrome for shipments in October - December quarter of 2009 has been settled with stainless steel companies in Europe and Japan by a rise of 14 US-Cents per lb. of Cr from that for July - September quarter but spot price of high carbon ferro-chrome (charge chrome) in the USA and China has already weakened. Namely, spot price of high carbon ferro-chrome in the USA has come down to a level of 87 - 90 US-Cents per lb. of Cr at present, having fallen by 2 US-Cents compared with that in 2 - 3 weeks ago. This movement of spot price is due to the situation that the market has felt a repugnance for the unclear production of stainless steel in the USA for the future. South African producers of ferro-chrome are requesting the Government of South Africa to regulate the exports of chrome ores from South Africa to China with an aim to sustain price of high carbon ferro-chrome in the Chinese market.

<> Manganese metal = According to the customs-statistics released in China, this country exported 12,885 tons of manganese metal (HS Code : 81110010) and also 8,241 tons of manganese metal (HS Code : 81110090) respectively in September of 2009 and a basic tone to export manganese metal from China has broken away from the worst time. Chinese shippers are now offering electrolytic manganese metal for export at US$2,600 - 2,650 per metric ton FOB but the trading companies concerned in Japan have aimed to purchase this metal at a lower price than US$2,600 per metric ton FOB China and the price contracted sporadically in last week was on a lower price of US$2,500 per ton FOB. Owing to the facts that the production of stainless steel in China decreased in October but LME nickel price maintained a firm tone in the month, domestic price of electrolytic manganese metal in China has bottomed out by CNY130,000 per metric ton and risen to a level of CNY133,300 - 135,000 per ton ex. plant at present. This price level is not payable for cost to produce electrolytic manganese metal in China and the operation rate for production of electrolytic manganese metal in China has come down to a scale of 60% on average.

<> Silicon metal = The attitude for imports of silicon metal into Japan in 2009 taken by aluminum alloy plants has faced an emergent case and the system in Japan to contract silicon metal on quarterly base has collapsed, having caused to shift this business manner to that on spot base. Spot price of Chinese silicon metal with 5.5.3 grade is US$1,780 - 1,790 per metric ton FOB at present, having risen to a higher level than US$1,830 per metric ton on CIF Japan base in some cases. Incidentally, reflecting the ecology boom, the demand for silicon metal with 4.2.1 grade for chemical use from overseas countries has deeply rooted and the circumstances to transact silicon metal have turned to a favorable tone after a long interval. In consequence of that Chinese producers had reduced their production of silicon metal with 5.5.3 grade in a rainy season, these producers have held less stocks of this metal. A drought season in China is coming soon and the production of silicon metal in winter season will certainly decrease. Accordingly, in expectation of a rise of price for silicon metal in the near future, Chinese shippers have taken a bullish attitude toward sales of silicon metal. The second bottom of price for silicon metal as anticipated by such consumers as aluminum alloy plants, and so on is thought to be unable to arise and consumers' side is moving to purchase silicon metal in order to supplement their stocks.

<> Molybdenum = Molybdenum prices have still continued on a weak tone and spot price of molybdenum oxide has recently entered into a level of US$10 per lb. of Mo, which has been understood as the border line to fall. The lowest price of molybdenum oxide in this year was US$7.70 per lb. of Mo as recorded in April but, at present, it is hard to ascertain which price of molybdenum oxide would be the second bottom. In anticipation of the demand for molybdenm from the western world supposed to firm up in the second half of 2009, Chinese suppliers have purchased on speculation a substantial quantity of molybdenum in the first half but this commitment missed to hit and Chinese side has turned to be in a hurry to sell their stocks of molybdenum by disappointments, having resulted in a fall of molybdenum prices. The contracts with major consumers in Japan on imports of molybdenum for shipments in the fiscal year of 2010 are usually concluded in November - December of 2009 but Japanese consumers have already informed molybdenum producers of an intention, which Japanese side will take a cautious attitude for purchases of molybdenum for an opaque forecast of the molybdenum market.
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last modified : Fri 06 Nov, 2009 [09:58]
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