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|Japan Imported Ferroalloy Market Report; February 29, 2012|
|= Indian silico-manganese price jumped =|
Market outlook in Japan of the imported ferroalloys as of February 29, 2012 is as follows:|
<> General view: Yen suddenly started to weaken due to the recent change in foreign exchange control policy by the Bank of Japan. The currency depreciated against U.S. Dollar by Yen3 - 4 during the past two weeks. The weaker yen naturally brings high ferroalloy prices in Yen in domestic markets. Silico-manganese price for March deliveries was already raised by Yen10,000/ton compared to its February price, reflecting the higher-priced offers of the imported material and, will be raised further in the contracts for the Q2 (April - June) deliveries, if the current (weaker) level of Yen continues. Ferrosilicon price for the Q2 will also rise on the currency factor. It is still a little premature to try to foresee how much of increase in the prices for the Q2 is likely, but market concern is anyway sharply focused on the import offer prices (in U.S. Dollars) and Yen/US$ exchange rates in the coming weeks.
<> Ferrosilicon: The market in China for export has been quiet, reflecting the narrow-ranged price fluctuation. Current level of offers of Chinese origin material is US$1,400 - 1,420/ton CIF.
<> Silico-manganese: The Indian sellers (producers and shippers) have continued the efforts for still higher prices. The offers since last week have been at US$1,300 - 1,350/ton CIF, sharply up by UIS$200/ton with actual deals done at US$1,230 - 1,250/ton CIF for shipments in March. There seems no tonnage any more to offer for March. The earliest lot currently negotiable is for April shipment. The bullish attitude of the Indians is based on not only the renewed European interests but also the increase in energy cost in India. The power rate has substantially risen in India, especially in the silico-manganese producing areas, such as Visag, Andhara Pradesh and so on. In addition, the shutdowns in South Africa and in Australia are causing suspense about supply. In Japan, it turned out recently that not enough spot materials were available, because traders refrained from building positions last December when the price dipped, and as a result there were only a few bidders to the inquiries for March deliveries by some of the major EF mills. Although the market has been rallied by the sharp rise in price, there is always a risk of buying at peak. A market source predicts that the peak will be in this case around US$1,400/ton.
<> Charge chrome: ESKOM, the parastatal power-generating/distributing company in South Africa seems to have made a miscalculation in foreseeing supply and demand of power. The company is now forced to buy back the power it had contractually allocated to users, causing chaos in power supply to start all over the country. If selling back the allocated power is more profitable than producing ferrochrome, and it is now, output of the alloy in South Africa will be naturally reduced. Therefore, the benchmark price for the Q2 (April - June) of 2012 is quite likely to rise. Smelters' idea of the increase was US¢10 - 15/lb in January, but at this moment, it is climbing to US¢20/lb.
<> Low-carbon ferrochrome: Things will become more concrete about the price in Japan for the Q2 (April - June) of 2012 when March comes. In Europe, there was recently a spot deal done at US¢215/lb for C<0.1%, about US¢5/lb higher than in December, but the prices in the contracts, so far three contracts, at which major stainless steel mills concluded in February were almost unchanged from the level in December (US¢202 - 205/lb CIF). Currently the price in Japan is probably the lowest in the world. Unlike charge chrome, Japanese market seems to need some more time before it takes a rise in price as granted for the Q2.
<> Molybdenum: While some deals among dealers hit more than US$15/lb for manganese oxide, the most traded price levels are in an up trend at US$14.70 - 14.85/lb on thin spot availability. However it is worth noting that the trend may turn around anytime, as there is always a fear for the oversupply in the market.
<> Silicon metal: Dry season continues until February in China, forcing the operational rate of each smelting plant stay low. The offer price of 5.5.3 grade has been basically unchanged at US$2,400 - 2,450/ton CIF.
|last modified : Tue 06 Mar, 2012 [10:54]|