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Heavy Snowfall Attacked East-North Of China Accelerates Aggravation In FeSi Deliveries
= Price To Be Contracted On Monthly Base Is Inevitable To Rise, Weakened Yen Rate Also Influences On Yen Price
Owing to a heavy snowfall which has attacked East-North of China, including the zone of Beijing, the facilities for inland transportation have been troubled. The scheduled route to transport cargoes of ferro-silicon from such production bases as Inner Mongolia Aut. Region and Ningxia Hui Aut. Region to Tianjin shipping port has been influenced seriously by this heavy snowfall and an anxiety for orderly shipments to Japan and measures to secure actual cargoes is arising.

By taking into consideration of the matters, which the stocks of ferro-silicon in Japan held by trading companies and distributors in December of 2009 are anticipated to become thin and Lunar New Year holidays in China (during the 13th - 19th February of 2010) will certainly cause to be sluggish in commercial activities in this country, the prices of Chinese ferro-silicon for shipments in January - March quarter of 2010 have been already contracted at US$1,200 - 1,230 per metric ton CIF Japan. A higher price as settled is US41,280 CIF but the case to contract ferro-silicon for shipments in April - June quarter is unable to see. In addition, the deliveries of Chinese ferro-silicon in question are now moving to have unstable factors because of an unexpected heavy snowfall as mentioned above.

The representative of a leading processing company in Japan has urgently visited China from this week in order to ensure the deliveries of ferro-silicon. There is a sign that distributing companies in Japan will successively visit China for the same purpose.

The Yen prices of ferro-silicon contracted with electric furnace mills for shipments in January - March quarter of 2010 are in the range of Yen 125,000 - 130,000 per metric ton delivered to mills, having basically rolled over from those in the preceding quarter of October - December of 2009. However, the prices on US$ base as contracted have risen and, consequently, the Yen prices have turned to be a loss for distributors. From the beginning of January of 2010, the exchange rate of Yen has weakened and come down to US$1.00 : Yen 91.50 - 92.00 but the Yen prices contracted with mills in December of 2009 had been based on the exchange rate of US$1.00 : Yen 88 - 89.

Under the circumstances, Yen price of ferro-silicon to be contracted with electric furnace mills on monthly base is anticipated to rise further (Yen price contracted for January shipment has already risen by Yen 2,000 per ton). A key point is the cargoes contracted to import into Japan during January - March quarter and it is marked to see how many cargoes will be actually delivered in Japan during the quarter. If nondeliveries would have occurred, it should become necessary to purchase ferro-silicon at a higher price than US$1,300 per metric ton CIF Japan as an emergent case and this higher price is anticipated to prevail in the market of Japan. The prices of ferro-silicon offered from China on the end of last year were still on a level of US$1,300 - 1,350 CIF.
last modified : Wed 13 Jan, 2010 [10:49]
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