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Market Tendency On Imports Of Ferro-Alloys At 15th October 2010
= After Long Holidays In China Were Over, Domestic Prices Of Bulk Ferro-Alloys Have Turned To Fall Somewhat
The market tendency by item on imports of ferro-alloys into Japan at the 15th October of 2010 is as follows ;

<> General view = In the course of a political tension between Japan and China as continued, the long holidays in China were over. After the holidays had passed, domestic prices of ferro-silicon and silico-manganese in China have fallen slightly. A view prevailing in the market is that this small fall of the prices has been caused by the sales to gain a profit and a further and substantial fall of these prices is supposed to be unlikely. This aspect is a different development of prices from that after the 2008 Beijing Olympic Games finished. The trading companies concerned have been rather interested in how to let suppliers deliver smoothly the cargoes for Japan under the outstanding contracts than new contracts to be negotiated. The situation at present is that, if new purchases of bulk ferro-alloys would have been contracted with Chinese suppliers at high prices, an antinomy, which the cargoes to be fulfilled under the outstanding contracts are not delivered, should come up.

<> Ferro-silicon = Domestic price of ferro-silicon in China has weakened by a fall of CNY100 - 200 per ton. The current price of Chinese ferro-silicoin offered for export is in the range of US$1,750 - 1,800 per metric ton CIF Japan, having reflected a weak tone of the domestic price as mentioned above and had a small fall of US$50 per ton., but the price as sporadically seen has taken a bullish level of US$1,900 CIF. The production activities of ferro-silicon in the Silicon Land of China are uneven and there are the three cases of (1) transmission of electricity has been actually stopped (in Ningxia Hui Aut. Region), (2) producers have been still negotiating stickily with the authorities concerned on supply of electricity (in Inner Mongolia Aut. Region), and (3) some plants are still keeping to produce illegally ferro-silicon. However, the production of ferro-silicon in China has been basically strengthened to be regulated and, therefore, a possibility to improve the operation toward November to December of this year is thought to be nil. It is wondered whether this weak tone of price for Chinese ferro-silicon is due to the sales to gain a profit or not. At all events, a forecast of price for Chinese ferro-silicon is not clear yet.

<> Silico-manganese = The price of silico-manganese offered from India for export has turned to rise to a level of US$1,450 - 1,480 per metric ton CIF Japan. This rise of price for Indian silico-manganese is still very far from a substantial rally but the negotiations with European steel mills on price of Indian silico-manganese are being resumed. The matter, having moved to diversify the countries for sales of Indian silico-manganese, has made Indian side bullish. However, the price of Chinese silico-manganese offered for export is on a level of US$1,600 - 1,650 per ton FOB by a fall of US$50 per ton but a differential of prices between Indian product and Chinese product is still substantial. Unless contracts are able to be concluded on long-term base, it will be hopeless to be successful in making contracts at fixed prices. Domestic price of silico-manganese in China has been maintained on a high level of CNY9,250 per ton at present but a discount of CNY30 - 50 per ton from this price is also sporadically seen.

<> Charge chrome = The negotiations on price of South African for shipments to Japan in October - December quarter of 2010 are still taking a long period for its settlement. The price of South African charge chrome for October - December quarter has been already settled with European consumers by the roll-over but Japanese mills have been not satisfied with this settlement and the negotiations with South African producers are still pending. Owing to the fact that the exchange rate of South African Rand against US-Dollar has strengthened by 10%, the cost to export charge chrome from South Africa has faced a severity.

<> Silicon metal = The trouble in relation to tax evasion for export of silicon metal as arisen in Amoy of China has passed a peak but shippers said that the cost to export silicon metal has raised for a portion of this tax evasion. Accordingly, Chinese side has taken a severe attitude to rise price of silicon metal for export. The background is a tightness for supplies of actual cargoes. The production of silicon metal in China is going to be reduced hereafter as a drought season in winter is coming and Chinese suppliers have taken a bullish position for sales of silicon metal, because the deliveries are anticipated to tighten. The current price of Chinese silicon metal with 5.5.3 grade for export is in the range of US$2,600 - 2,700 per metric ton CIF Japan, having varied widely, and Chinese side has a strong intention to rise price of this metal. The cargoes of Chinese silicon metal with 4.4.3 grade are also becoming scarce and Chinese suppliers are wishing to rise price of this metal.

<> Manganese metal = Guangxi Zhuang Aut. Region and Guizhou Province are the main bases to produce electrolytic manganese metal in China but are being cut to supply electricity in relation to the problem of exhaust of carbon dioxide. The parties concerned said that the operation rate has declined to 50% of nominal capacity. Owing to the additional factors, which the difficulties to secure manganese carbonate as raw material are coming up and price of manganese carbonate has risen steeply (to CNY850 - 900 per ton of material = equivalent to US$8.50 per Mn 1%), the price of Chinese electrolytic manganese metal seems to be inevitable to rise. The price of manganese ore produced in China has at last risen to a higher level than that of manganese ore to be imported into China. The quality of manganese ore to import into China has differed from that of domestic ore produced in China but the latest prices of manganese ore fixed with Chinese customers on imports are in the range of US$6.10 - 7.20 per Mn 1% CIF China. For a reference, following the high prices prevailing in domestic market of China, the price of Chinese electrolytic manganese metal offered for export has risen to a level of US$3,400 - 3,450 per metric ton FOB. In view of the strengthened exchange rate of Japanese Yen against US-Dollar, Japanese side is supposed to be in a position to purchase Chinese electrolytic manganese metal at US$3,400 per metric ton CIF as the maximum.

<> Molybdenum = The price of molybdenum oxide offered recently by dealers is on a level of approximately US$15 per lb. of Mo CIF Japan. Even at the Conference held by LME, an analyst said that the excessive stocks of molybdenum accumulated in China (estimated to be 25 - 50 million lbs.) are anticipated to be resolved in January - March quarter of 2011 and, therefore, the international price of molybdenum oxide is thought to be inevitable to be sluggish by that time. When market prices of molybdenum products move to rise, there is a large probability, which the offensive for sales of molybdenum products to be taken by China will come up to the surface. China has become a swing supplier of molybdenum for the time being and, depending on the activities from China, the international prices of molybdenum products will have a possibility to fumble for a while.
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