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Market Tendency On Imports Of Ferro-Alloys At 30th June 2010
= Prices Of Steel Products In China Have Weakened, Throwing Its Shadow On Prices Of Ferro-Alloys
The market tendency by item on imports of ferro-alloys into Japan at the 30th June of 2010 is as follows ;

<> General view = The domestic prices of manganese ferro-alloys in China have continued to weaken since the end of May. Also, the price of manganese ore imported into China was able to maintain a bullish tone in the first half (January - June) of 2010 but that settled for shipments in two months of July and August has remained unchanged and the excessive stocks of manganese ore accumulated in China, which are estimated to be nearly 3,000,000 tons, have put a substantial pressure on price of manganese ore. The Central Government of China has abolished from the third week of June to fix the exchange rate of Chinese currency - CNY against US-Dollar and allowed to loosen the regulations for exchange rate of CNY. Accordingly, the latest exchange rate of CNY / US$ has strengthened by 0.555% but the changes of prices for exports of Chinese ferro-alloys are so far not seen. Also, the Government announced on the 22nd of June to revoke from the 15th of July export tax rebates for steel products to be shipped from Chin and this revocation of rebates is thought to put a considerable influence on exportable prices of Chinese steel products. Incidentally, domestic prices of steel products in China have weakened and, simultaneously, dark clouds are hanging over the steel market of China. The current production of crude steel in China has been going on a favorable tone but, on the contrary, domestic prices of steel products in China are flowing on a dark tide.

<> Ferro-silicon = The latest price of standard ferro-silicon offered from China to the USA is US$1,380 per metric ton FOB, having fallen by US$30 - 50 per ton. The purchases of ferro-silicon in the USA have made the rounds. On the other hand, Chinese suppliers succeeded in a rise of US$30 - 40 per ton, which was materialized in an early part of June for export to Japan, but, after that, price of Chinese ferro-silicon has no change. Chinese ferro-silicon is now being offered at US$1,450 - 1,470 per metric ton CIF Japan as remained unchanged. Therefore, price of Chinese ferro-silicon for Japan so far does not move but, owing to a raise of electricity fees, the cost to produce ferro-silicon in China is increasing gradually to sustain the market.

<> Silico-manganese = The price of silico-manganese offered from India once continued to fall but has still traced on a tendency to weaken further and finally come down to a level of US$1,400 per metric ton CIF Japan, which has fallen by US$150 per ton in comparison with the high level once offered from India in May. Chinese silico-manganese has still included the factors to increase its production cost but it is difficult to reflect the factors on the price to be offered for export (Chinese product is now being offered at US$1,580 - 1,620 per ton FOB). On the contrary, Chinese suppliers have been requested by Japanese trading companies to offer silico-manganese at a similar price to that offered from India. The negotiations with electric furnace mills on Yen price of silico-manganese for July - September quarter passed a peak but the reactions were thin. The background is a mood to sell Indian silico-manganese at discounted prices and the target to settle Yen price of silico-manganese with electric furnace mills at Yen 160,000 - 170,000 per metric ton delivered to mills for July - September quarter is supposed to be most difficult for the trading companies concerned. A normal extent to rise price of silico-manganese for the third quarter is thought to be Yen 2,000 - 3,000 per ton higher than those fixed for the preceding quarter of April - June and the negotiations were taken place all the time on a sluggish tone. The purchases of silico-manganese through tenders sporadically obtained lower prices in relation to disposal of the stocked cargoes and a lower price than Yen 150,000 per ton has become a normal level.

<> Charge chrome = The negotiations with European mills on price of South African charge chrome for shipments in July - September quarter started from an early part of June but lost its strength and, reflecting a change of the circumstances, turned to be inevitable to reduce the price. The reasons are the weakened exchange rate of Euro currency against US-Dollar and the fallen prices of high carbon ferro-chrome in domestic market of China. Consequently, South African producers have been driven to adjust an extent to be reduced. Many of the parties concerned have a view that the final price of charge chrome to be settled between South African producers and European stainless steel mills is anticipated to be on a line of 125 - 130 per lb. of Cr on DDP base.

<> Low carbon ferro-chrome = In relation to the price of low carbon ferro-chrome to be settled with regular consumers in Japan for shipments in July - September quarter of 2010, the producers in Russia and Kazakhstan have finally succeeded in a rise of the price as earnestly desired by them. These producers once insisted on the fact that recent price of low carbon ferro-chrome settled with Japanese consumers is not payable for their production cost in comparison with that of high carbon ferro-chrome, and a serious request to rise price of low carbon material was placed before consumers. Accordingly, the prices of low carbon ferro-chrome with C 0.1% max. contracted for July - September quarter are in the range of 205 - 208 US-Cents per lb. of Cr CIF Japan, having risen by 13 - 15 US-Cents compared with those fixed for April - June quarter. When the negotiations commenced, producers' side aimed to rise to a higher price than 210 US-Cents per lb. of Cr as prevailed on spot market at that time but this rise was not successful, because the market price of low carbon ferro-chrom in Europe had already changed to the situation, having reached the ceiling level.

<> Silicon metal = The current prices of silicon metal with 5.5.3 grade offered from China are in the range of US$2,130 - 2,150 per metric ton CIF Japan, having remained without a substantial change. However, the discounted price of 2,100 CIF has been sporadically seen. The trading companies concerned have an opinion that Chinese producers are utilizing low fee of electricity through hydroelectric power generation in summer time and, because of the circumstances, still keeping a profitability for their production of silicon metal.

<> Manganese metal = The Central Government of China enforces from the 15th of July their revocation of 5% tax rebate for export of manganese metal briquettes (HS Code No.8111-0090) and it is marked to see how extent does this abolishment of export tax rebate influence on the market of manganese metal in China. Chinese processors of manganese briquettes have given their attention to export declaration of this commodity to be applied to customs-offices from the 15th of July and held back to make a new offer. When export tax rebate is revoked, the cost is estimated to have a raise of US$100 - 120 per ton. According to a presumption by the parties concerned, the prices of electrolytic manganese metal (in form of flakes) contracted in the last 2 weeks to export from China are thought to be in the range of US$2,800 - 2,850 per metric ton FOB. Export tax rebate for electrolytic manganese metal (flakes) was already revoked from August of 2005 and does not originally concern with the problem of manganese briquettes as arisen in this time. However, the actual quantity of manganese briquettes exported from China is unable to know and, therefore, it is difficult to ascertain an extent to put an influence on the whole export of manganese metal. For a reference, owing a heavy rainfall attacked Huanan district of China, where is a main base to produce electrolytic manganese metal, the quantity of electrolytic manganese metal to be produced in Jishou Luxi area has been reduced by nearly 90% and, accordingly, the supply situation of this metal in China is moving to tighten.

<> Molybdenum = Market price of molybdenum oxide is still fluctuating. The bottom price of molybdenum oxide was US$13.50 per lb. of Mo as seen in the middle of June. After that, price of molybdenum oxide rallied somewhat but was unable to rise further and faced the wall of US$15.00. As far as a breathless feeling of monetary market has continued in Europe, traders are unable to move on new purchases of molybdenum and have to take a positive attitude for disposal of the cargoes held by them.

<> Ferro-vanadium = The union of Eskom, national electric power corporation in South Africa, already announced to go on a strike from next week and, as South Africa is the largest country to produce vanadium in the world, an anxiety for the situation in South Africa has come up but this labor dispute is so far not affecting vanadium prices. Dealers are now offering ferro-vanadium at US$28.50 - 30.00 per kg. of V CIF Japan.
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last modified : Tue 06 Jul, 2010 [10:24]
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