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Market Tendency On Imports Of Ferro-Alloys At 30th November 2009
= In View Of Steeply Strengthened Ex. Rate Of Yen / US$, Theme Is To Contract Ferro-Alloys At Yen For Q1 / 10
The market tendency by item on imports of ferro-alloys into Japan at the 30th November of 2009 is as follows ;

<> General view = In consequence of that the exchange rate of Japanese Yen against US-Dollar has steeply strengthened, this strengthened exchange rate had once reached the level of US$1.00 : Yen 84 after an interval of 14 years and 4 months but has calmed down somewhat to the rate of US$1.00 : approximately Yen 86.50 as of the beginning of this week, showing some stabilization. However, the trading companies concerned are supposed to have taken only an attitude to hold back imports of ferro-alloys for the time being. Since the Central Government of China has raised from the 20th of November electricity fees by 5.3% on the average, domestic prices of ferro-alloys in China have rebounded and, by taking this opportunity, the parties concerned have attempted to revive prices of ferro-alloys in Japan but this intention is tumbling over. However, the stocks of ferro-alloys in distribution sector of Japan, including those held by trading companies, have decreased to the lowest level during the last one year and, therefore, apart from some of stockists, a loss caused by the strengthened exchange rate of Yen against US-Dollar is estimated to be insignificant.

<> Ferro-silicon = Electricity fees in China have raised as already informed from this country. By taking a chance on this raise of electricity fees, Chinese shippers have turned to offer ferro-silicon at US$1,200 per metric ton FOB by a rise of US$50 per ton but, incidentally, the exchange rate of Japanese Yen against US-Dollar has strengthened considerably and, consequently, a margin to cope with this extraordinary change of the exchange rate to be taken by Japanese trading companies is thought to be restrictive, because it is necessary for them to ascertain an issue of this steeply strengthened exchange rate of Yen / US$. For a reference, on the 24th of November when was one day before the exchange rate of Yen / US$ has moved to strengthen, a leading electric furnace mill held a tender to purchase ferro-silicon for December shipment and the lowest price bidden was Yen 118,000 per metric ton.

<> Silico-manganese = A raise of electricity fees as announced by Chinese Government is felt to have encouraged domestic price of silico-manganese in China and the price has risen to CNY8,000 per ton (US$1,176). Accordingly, Chinese shippers have revised their price for export and are now offering silico-manganese at US$1,400 per metric ton CIF Japan by a rise of US$50 per ton. However, owing to the facts that the exports of silico-manganese from China To Europe are sluggish and Indian silico-manganese is being offered at discounted prices (US$1,250 - 1,300 per metric ton CIF Japan), Japanese side has no interest in purchases of Chinese silico-manganese. The steeply strengthened exchange rate of Japanese Yen against US-Dollar as emerged from the second half of last week has put again a hard question to trading companies. A leading electric furnace mill in Japan held on the beginning of last week a tender to purchase silico-manganese for December shipment and the lowest price bidden was not so lower than a level of Yen 130,000 per metric ton but, after that, the problem, which the exchange rate of Yen against US-Dollar has strengthened considerably, has arisen and the theme to be resolved has been carried over to the first quarter (January - March) of 2010.

<> Charge chrome = Producers' side so far does not express their intention of how to propose the benchmark price of South African charge chrome for shipments in January - March quarter of 2010. However, the circumstances in 2010 are supposed to be inevitable to face again difficulties. Major producers of ferro-chrome in the world, excluding South African producers, already said that it is hard to rise again price of charge chrome (high carbon ferro-chrome) for shipments in January - March quarter of 2010. A key for price of charge chrome in 2010 is how extent does the demand for this ferro-alloy in China revive. Spot price of high carbon ferro-chrome for export to China has been already concluded on a level of 78 US-Cents per lb. of Cr CIF and, therefore, a differential between spot price and benchmark price (103 US-Cents for Europe and 111 US-Cents for Japan) has enlarged.

<> Manganese metal = Because of a raise of electricity fees as a whole of China, producers of electrolytic manganese metal in China have at once risen their price of this metal, which consumes more electric power for its production. The extents to raise electricity fees vary depending on districts but the volume of electric power to be consumed for production of one ton of electrolytic manganese metal is 7,000 KWH and, accordingly, the cost for production of this metal is estimated to increase by more than CNY200 per ton. The matter to pass on smoothly this raise of the cost to the price for export is subject to the demand for Chinese electrolytic manganese metal from overseas countries but Chinese producers have risen their prices to offer for export by US$50 - 100 per ton.

<> Silicon metal = Chinese silicon metal with 5.5.3 grade for aluminum industry is being currently offered at US$2,000 - 2,100 per metric ton CIF Japan, having shown a sudden and sharp rise. However, a raise of electricity fees was already spread over the market by Chinese side from the end of October and, accordingly, Chinese producers have held back to make new offers in expectation of a rise of price for silicon metal in the near future. Reflecting a raise of electricity fees enforced in this time, the cost to influence directly on production of silicon metal is estimated to increase by approximately US$50 per ton but the price of Chinese silicon metal offered for Japan has jumped up to a higher level than this increase of the cost. One of the reasons for this rise of price is due to the reluctant sales of Chinese silicon metal as a drought in winter season is coming. By taking into consideration of the supply situation of electric power in winter time, some of aluminum alloy plants in Japan have been purchasing gradually in confidence silicon metal for shipments in January - March quarter of 2010 and, therefore, a peak of the purchases is thought to have generally passed over. Consequently, the current high price (US$2,100 CIF) of silicon metal offered from China is not workable in Japan but the cargoes of silicon metal produced and stocked in China have become thin and, therefore, it will be inevitable to be on a basic tone to rise further and gradually prices of Chinese silicon metal.

<> Molybdenum = China imported 2,574 tons in material of molybdenum ores (roasted ore and unroasted ore) in October of 2009, having decreased to half of that (5,066 tons) in the previous month of September, and the current negotiations on molybdenum for shipments in November to December are suggesting to be unable to expect favorable results for suppliers. The imports of molybdenum by China as raw material for production of stainless steel have decreased largely from August and, in addition to a sharp decline in imports of molybdenum, the imports of nickel, ferro-chrome and stainless steel scrap by China as raw materials have decreased to a substantial extent. Spot price of molybdenum oxide has bottomed out but a power to rebound molybdenum prices is not enough and market price of molybdenum oxide has remained as unchanged from the level of US$10.80 - 11.40 per lb. of Mo CIF Japan.

<> Ferro-vanadium = Dealers are offering ferro-vanadium at US$22.00 - 24.00 per kg. of V CIF Japan, having fallen by US$0.50 - 1.00 per kg. of V compared wit that at the end of October.
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last modified : Fri 04 Dec, 2009 [10:57]
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