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China Strongly Feels Blockage For Exports Of Manganese Ferro-Alloys
= Owing To Exports At Discounted Prices By India, Difficult To Export At Prices Based On Strengthened CNY Rate
Many of the parties concerned have a strong opinion that the exchange rate of Chinese Currency - Yuan against US-Dollar will strengthen further and raise by 3% within this year, and Chinese producers, who have been suffering from an increase of the cost to produce manganese ferro-alloys because of the sharply risen prices of manganese ores and the raised fees of electric power in China, are supposed to be attacked further by the sluggish exports of manganese ferro-alloys from China. In consequence of that the Central Government of China has recently decided to relieve the exchange rate of Chinese Yuan (CNY) against US-Dollar, which was so far fixed, the exchange rate of CNY / US$ has strengthened to US$1.00 : CNY6.7 at the beginning of this week from US$1.00 : CNY6,83 in last week.

According to the customs-statistics released in China, this country exported 24,016 tons of silico-manganese in January - April of 2010, which has a considerable decrease of 32% compare with that (34,894 tons) in the same period of 2009 and also shrunk to approximately 1/10 of that (286,893 tons) in the same period of 2008, when China's exports were on a favorable tone.

Nevertheless, China produced 7,651,000 tons in total of all ferro-alloys in the first 4 months of 2010, having had a substantial increase of 33% compared to that (5,750,000 tons) in the same period of 2009, and the production of ferro-alloys in China (excluding that of silicon based ferro-alloys) has sporadically seen a signal to be more inclined to cover domestic consumption.

Ferro-silicon is one of the most important ferro-alloys to be exported from China and the output of this ferro-alloys in 2010 has revived. As a matter of fact, China exported 215,268 tons of ferro-silicon in January - April of 2010, which had a remarkable increase of 83% compared with that (117,299 tons) in the same period of 2009. In relation to other countries than China to export ferro-silicon and silico-manganese, rival sources have been seen, particularly in Asian region.

Silico-manganese produced in India is being sold from last year at discounted prices in Japan and other Asian countries and Indian silico-manganese is being continuously offered at 10 - 15% lower prices than those offered from China. On the other hand, a rival country for China to export ferro-silicon is Russia. Russia exported 310,000 tons per annum of ferro-silicon in 2009, including 113,000 tons for Asian countries which were shipped to Japan, South Korea, Taiwan, and so on and shared 36% of the whole export from Russia in 2009. Europe and the USA are the traditional markets for Russia to export ferro-silicon but Russia has currently attached an importance to the Asian countries. However, Russian leadership in control of pricing is still weak and pricing of Russian ferro-silicon is so far usually following Chinese price.

Even after the exchange rate of CNY / US$ has entered in a new phase, price of silico-manganese offered newly from China is still in the range of US$1,600 - 1,650 per metric ton CIF Japan, having remained unchanged. In view of the cost calculation for production of silico-manganese, the price of silico-manganese to be offered from China to Japan is supposed to be higher than US$1,700 per metric ton CIF as a reasonable level but Indian silico-manganese is still being offered at US$1,450 per metric ton CIF Japan and, therefore, the strengthened exchange rate of Chinese CNY against US-Dollar is still unable to reflect a merit of the CNY exchange rate on US$ price. Accordingly, Chinese suppliers have strongly felt the blockage, making impossible to reflect the high cost on US$ price. Another reason is due to the weakened domestic price of silico-manganese in China.

Market prices of Chinese ferro-silicon are in the range of US$1,450 - 1,470 per metric ton CIF Japan in last week, having risen by US$30 - 40 per ton, but the price in this week so far does not see a substantial change and is supposed to have made a pause to rise further.
last modified : Mon 28 Jun, 2010 [11:18]
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