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Market Tendency On Imports Of Ferro-Alloys At 15th December 2009
= Because Of Strengthened Ex. Rate Of Yen / US$, Japanese Trading Companies Have Shrunk Intention For Imports
The market tendency by item on imports of ferro-alloys into Japan at the 15th December of 2009 is as follows ;

<> General view = Being influenced by the steeply strengthened exchange rate of Japanese Yen against US-Dollar (once US$1.00 : Yen 84), which attacked the market of Japan in the 4th week of November to the first week of December, trading companies concerned in Japan have shrunk largely their intention to import ferro-alloys. After that, the exchange rate once recovered to the level of US$1.00 : Yen 90 but is currently moving in the range of US$1.00 : Yen 88 and a fear of the loss to be inflicted by the strengthened exchange rate of Japanese against US-Dollar has poured a cold water on the positive attitude for imports of ferro-alloys to be taken by the distributors concerned. This aspect has disclosed a weakness in transactions of ferro-alloys without a function to hedge its risks as seen from dealings of base metals at LME.

<> Ferro-silicon = The actual cargoes of ferro-silicon have become scarce. In view of the facts that domestic price of ferro-silicon in China has turned to rise and the stocks of ferro-silicon in Japan have decreased to a considerable extent, the price of ferro-silicon imported into Japan has to be inevitable to rise in usual case. Nevertheless, the situation in this time seems to have differed somewhat. Chinese ferro-silicon is now being offered at a higher price than US$1,200 per metric ton CIF Japan but, when Yen price of ferro-silicon contracted with electric furnace mills is thought to be a lower level than Yen 120,000 per ton, this Yen price settled with mills is supposed to be a loss for trading companies. Owing to a dense fog occurred in China during November, the shipments of ferro-silicon from Tianjin port were unable to effect but the circumstances are improving gradually from the beginning of December and a blank continued for one month has caused to derange the rotation of shipments, having left such aftereffects as difficulties for chartering and sharp raises of ocean freight.

<> Silico-manganese = Electric furnace mills in Japan have already determined a negative plan, which will reduce the production of crude steel in January - March quarter of 2010 to a large extent. However, it is not clear yet how extent does this plan influence on purchases of raw materials. The negotiations with electric furnace mills on Yen price of silico-manganese for shipments in January - March quarter of 2010 are anticipated to be gloomy. In order to prepare settlement of accounts to be closed on the 31st March of 2010, mills' side will adjust their purchases of raw materials, resulting in less quantities to be purchased. The Yen prices of silico-manganese settled with electric furnace mills for shipments in October - December quarter of 2009 have been based on the exchange rate of US$1.00 : Yen 92 - 93 but, depending on the movements of exchange rate of Yen / US$ which has still maintained a basic tone to strengthen, Yen prices of silico-manganese to be contracted with mills for shipments in January - March quarter of 2010 are supposed to change largely. There is a possibility, which Yen prices of silico-manganese for January - March quarter are based on the exchange rate of US$1.00 : Yen 87 - 88. From this point of view, apart from US$1,250 - 1,300 per metric ton CIF Japan offered with Indian and South African products, the price of US$1,400 CIF offered with Chinese silico-manganese is not workable on the market of Japan. As far as the market of silico-manganese in Europe has been depressed, the producers in India, South Africa and Ukraine are supposed to have no other way than that to take the offensive for sales of silico-manganese to Japan. China is thought to be difficult to play an important role of selling silico-manganese.

<> Charge chrome = In consequence of that major producers of ferro-chrome in the world gathered in large numbers in India, it is wondered how extent does this meeting influence on the negotiations to settle price of charge chrome (high carbon ferro-chrome) for shipments in January - March quarter of 2010. It is marked how does price of charge chrome move in the next 1 - 2 weeks. Major producers, excluding South Africans, have already expressed their intention to remain the benchmark price of charge chrome for January - March quarter as unchanged from that for the preceding quarter of October - December and, although it is still not clear yet how do South African producer move on price for the next quarter, the parties concerned have an opinion that South African side will maintain the principle to roll over the benchmark price. It is a good news for major producers that, reflecting the positive purchases of high carbon ferro-chrome (charge chrome) resumed mainly by China, spot price of this ferro-alloy in China has risen again. Spot price of 78 US-Cents per lb. of Cr CIF China for high carbon ferro-chrome was prevailing until November but disappeared recently and Indian producers moved from the beginning of December to take the offensive to rise spot price of high carbon ferro-chrome. Accordingly, the price of Indian high carbon ferro-chrome to be possible to contract has risen to a level of 80 - 83 US-Cents per lb. of Cr CIF Japan.

<> Low carbon ferro-chrome = The negotiations with special steel companies in Japan on price of low carbon ferro-chrome for shipments in January - March quarter of 2010 are scheduled to be taken place soon. The demand for low carbon ferro-chrome in Japan collapsed in the first half of 2009 but turned to revive partially from October - December quarter. However, there is a substantial differential between steel companies. The demand for low carbon ferro-chrome from the Ohita Works of Nippon Steel, the Kokura Works of Sumitomo Metal Industries and Daido Steel is anticipated to be still depressed and unable to recover even in January - March quarter of 2010 and afterwards. Major producers are in the direction to insist on roll-over of price for low carbon ferro-chrome to be shipped in January - March quarter but, in case to be not possible to increase the quantities to be contracted as a whole, it is no wonder that an unexpectedly lowered price will be offered.

<> Silicon metal = The situation to import silicon metal into Japan has changed largely and turned to a basic tone to rise its price. The prices of Chinese silicon metal with 5.5.3 grade for aluminum industry offered by shippers are changing day by day and rising. The price contracted on the end of last week has risen to US$2,200 per metric ton CIF Japan and the parties concerned have viewed that the case to rise price of silicon metal up to a level of US$2,500 CIF in the near future will be inevitable. Under the present situation, which Japan decreased the imports of silicon metal from China in January - October of 2009 to half of that in the same period of 2008, the stocks of silicon metal held by consumers and trading companies in Japan have touched the bottom. Since Chinese side reduced the output of silicon metal in April - September of 2009, when is most suitable time to increase production of silicon metal, the stocks of silicon metal at Chinese producers have decreased to an extreme extent. Therefore, in winter season to be obliged to reduce production of silicon metal, valuable cargoes of Chinese silicon metal will be intended to be sold at higher prices.

<> Manganese metal = Being stimulated by a raise of electricity fees enforced from the 20th of November in China, price of Chinese electrolytic manganese metal is now being offered by a rise of more than US$50 per ton but the reality of this market is unable to follow this rise and the highest price of this metal offered from China is US$2,600 per metric ton CIF Japan at present without an actual transaction.

<> Molybdenum = In prior to the listing molybdenum oxide in LME from the 22nd February of 2010, it is viewed that excessive funds move to purchase molybdenum in January - February of 2010. A potentiality to expect to shift price of molybdenum oxide to a basic tone to rise will exist. However, owing to a lack of the actual demand for molybdenum, the reality has kept price of molybdenum oxide on a level of approximately US$11 per lb. of Mo for the last 6 weeks. Reflecting the excessive imports of molybdenum by China, the excessive quantities of molybdenum stocked in China have caused to slow down distribution of these cargoes.

<> Ferro-vanadium = Dealers are offering ferro-vanadium in the range of US$20.50 - 23.00 per kg. of V CIF Japan, indicating a gradual fall. This price level has fallen by US$1.00 per kg. of V compared with that on the end of November and, in comparison with a fall of price for ferro-vanadium, market price of vanadium pentoxide is on a basic tone to remain unchanged. Therefore, the linkage between price of vanadium pentoxide and that of ferro-vanadium, which was seen in the past years, disappeared and price of ferro-vanadium is moving separately from that of vanadium pentoxide. Accordingly, the aspect of high price of raw material against low price of product is continuing.
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last modified : Mon 21 Dec, 2009 [09:47]
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