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Market Tendency On Imports Of Ferro-Alloys At 28th December 2010
= Resumed To Produce Ferro-Silicon In China, Bearish Attitude For Sales To Gain Funds
The market tendency by item on imports of ferro-alloys into Japan at the 28th December of 2010 is as follows ;

<> General view = Owing to the regulations for supply of electric power with a strong political intention as enforced by the Central Government of China in relation to the control in exhaust of carbon dioxide, Ningxia Hui Aut, Region, Inner Mongolia Aut. Region, and so on are the objective districts to be restricted for supply of electric power but the regulations have been loosened from last week and the production activities of ferro-alloys in these districts have revived. At the same time, the stopped and reduced productions of ferro-alloys continued for 2 months have resulted in a shortage of funds at producers and it has become an urgent matter to finance for the tightened monetary situation. Therefore, it is inevitable for Chinese producers to take a positive attitude for sales of ferro-alloys. The funds are necessary to cover the wages to be paid to employees, in addition to the money required to be carried forward to the following year, and this tightness of the monetary position is thought to continue until the holidays for Lunar New Year in China to start from the 2nd February of 2011.

<> Ferro-silicon = Reflecting the fact that the costs for ferro-silicon held by trading companies have differed subject to the conditions at each of them, the negotiations with electric furnace mills on Yen price of ferro-silicon for shipments in January - March quarter of 2011 have been settled by a considerable differential of Yen 20,000 per ton between the highest and lowest ones at the maximum. A lower price of Yen 140,000 per metric ton delivered to mills as calculated straightly from the US$ price offered at present is sporadically seen and the circumstances have been confused. The latest price of ferro-silicon offered from China has fallen to a level of US$1,600 per metric ton CIF Japan. For a reference, even in spring of next year, there will be a big probability to fall further price of Chinese ferro-silicon. The price of US$1,600 CIF is supposed to be still payable for the cost for distributors but a further fall of price for ferro-silicon is thought to cause a severity of the profitability. Domestic price of ferro-silicon in China is also falling in a rapid succession and has come down CNY7,450 per ton as of the end of last week, having fallen by 15% from that the high one. The prices of Chinese ferro-silicon in both of domestic and overseas markets are anticipated to see a further fall.

<> Silico-manganese = The Yen prices of silico-manganese contracted with electric furnace mills for shipments in January - March quarter of 2011 are in the range of Yen 130,000 - 135,000 per metric ton delivered to mills, which have been reduced by Yen 8,000 - 10,000 per ton compared with those fixed for October - December quarter of 2010. At a tender held recently in Japan to purchase silico-manganese, the lowest price bidden was Yen 126,000 per metric ton delivered to mills. The background is a sharp fall of price for Indian silico-manganese. The price of silico-manganese produced in India and offered recently has fallen to a level of US$1,300 per metric ton CIF Japan, which has been reduced by US$100 per ton compared to that prevailed in November. In preparation for busy financing at the end of the year, the disposals of Indian silico-manganese at discounted prices for realization are thought to be being done. Indian producers have actively invested their funds in the facilities for ferro-alloys and, therefore, are supposed to have been required for its financing. The price of manganese ore as raw material for January 2011 shipment has been decided to maintain the same one as that fixed for December 2010 shipment but, under the present situation, the market price of silico-manganese is fluctuating with regardless of price for raw material. Owing to the loosened control for a reduction in productions of ferro-alloys, domestic price of silico-manganese in China is weakening gradually and the current ones are in the range of CNY8,100 - 8,200 per ton but price of Chinese silico-manganese is still unable to come down the level to be workable on export.

<> Charge chrome = The price of South African charge chrome for shipments to Japan in January - March quarter of 2011 has been settled by a reduction of 5 US-Cents per lb. of Cr and the new benchmark price is 133 US-Cents per lb. of Cr CIF Japan. Because of the fact that stainless steel companies of Europe have entered into the countermeasure to decrease their stocks of ferro-chrome, the offensive for sales taken by shippers has collapsed and, consequently, a reduction of 5 US-Cents has been agreed on. An outlook for price of charge chrome in 2011 is from when does the price turn to rise, and the parties concerned are being interested in this matter. The current aspect is an overproduction of ferro-chrome but the factors to turn the supply situation to a tightness from the second half of 2011 have existed. Also, the world output of stainless steel in January - March quarter of 2011 is expected to recover in comparison with that in October - December quarter of 2010.

<> Low carbon ferro-chrome = Spot price of low carbon ferro-chrome with carbon 0.1% max. has firmed up to 215 US-Cents per lb. of Cr CIF Japan, having underpinned the price of 210 US-Cents settled with regular consumers of Japan. The market prices of low carbon ferro-chrome in Europe and the USA have been kept on a firm tone, although it is difficult to judge how extent does a sharp rise of price for chrome metal back up spot price of low carbon ferro-chrome, but this aspect is a bullish factor for the market of low carbon ferro-chrome.

<> Molybdenum = The prices of molybdenum oxide traded between dealers are in the range of US$16.20 - 16.40 per lb. of Mo as rallied from the last ones and are now moving in anticipation of the price for January - March quarter of 2011. The excessive imports of molybdenum by China in 2010 once caused the distressed cargoes but, reflecting the positive exports of these accumulated cargoes from China, there is a strong view in the market that the excessive stocks of molybdenum in China are forecasted to be resolved in the course of January - March quarter of 2011, because an opinion to expect a rise of molybdenum prices in spring of next year is spreading over the market.
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last modified : Tue 11 Jan, 2011 [10:37]
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