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After Nation Day Was Over, Domestic Prices Of Bulk Ferro-Alloys In China Have Weakened
= As Countermeasures For Long Holidays, Purchases Made Round And Business Has Turned To Be Dull
Domestic prices of bulk ferro-alloys (ferro-silicon and silico-manganese) in China have fallen from the beginning of this week. After China had many holidays under the names of the Mid-Autumn Festival and the Nation Day in late September to early October, domestic prices of ferro-silicon and silico-manganese in China have started to fall somewhat from the 11th of October, reflecting the fact that the consumers concerned have already made the round of their purchases, and the market has become dull.

The latest domestic price of Chinese ferro-silicon has come down to CNY7,800 - 7,900 per ton by a fall of CNY100 - 200 per ton and that of Chinese silico-manganese has in principle remained without a substantial change but some offer is being made at CNY9,300 per ton by a fall of CNY50 - 100 per ton. These falls of domestic prices are thought to be a reaction to the steep rises of domestic prices by CNY1,700 per ton for ferro-silicon and by CNY1,300 per ton for silico-manganese respectively (profit-taking sales).

This is a usual case that, prior to many holidays, steel mills of China have purchased in advance raw materials as already done when the Beijing Olympic Games were held in 2008, and this arrangement has been based on an anxiety for the fact that, even if contract has been concluded, the timely deliveries are unable to be effected because of congestion.

Domestic prices of these two ferro-alloys in China have started with a slight fall but the fundamentals surrounding ferro-silicon and silico-manganese have remained without a remarkable change. On the contrary, the Central Government of China notified in October the provincial governments of concrete instructions, which the plants, located in Ningxia Hui Aut. Region, Inner Mongolia Aut. Region, Guangxi Zhuang Aut. Region, and so on, have to reduce their production of ferro-alloys (including the measure to cut supply of electric power).

The 28 companies in Ningxia Hui Aut. Region were notified on the 13th of September to stop supply of electric power and, in view of the fact that this Aut. Region has been comprised of a minority race, there is a strong probability that the second notification will be issued after the Nation Day (in the 1st to 7th of October) was over. It was already informed that Inner Mongolia Aut. Region will be instructed to cut production of ferro-alloys by 50% from the 15th of October, but the cases, which the measure to cut supply of electric power, have already arisen as of the end of last week, and the plants concerned have been driven to suspend their operations.

It seems that new offers of Chinese ferro-silicon and silico-manganese for exports to Japan are not made yet on the beginning of this week. However, it is marked to see whether new prices of these two Chinese ferro-alloys to be offered for exports to Japan will follow a weak tone of domestic prices or not. The trading companies concerned in Japan have been rather interested in seeing whether the deliveries will be fulfilled as contracted or not. The cargoes of Chinese bulk ferro-alloys have been already contracted at high prices for shipments to Japan in October to November but, unless the deliveries in question are effected stably, these contracts have nothing to be meaningful.

The movements of domestic prices for ferro-silicon and silico-manganese in China during April to October of 2010 were as per the table shown below ;
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last modified : Tue 19 Oct, 2010 [10:03]
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