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Japan Imported Ferroalloys Market Report; March 16, 2012
= Q2 (April - June) prices of bulk ferroalloys for EF mills to rise =
Market outlook in Japan of the imported ferroalloys as of March 16, 2012 is as follows:

<> General view: Yen continued to weaken to reach Yen84/U.S.$ on March 15, an eleven-month low. Indian silico-manganese price is still in up trend. Under the circumstances, the prices (in Yen) of bulk ferroalloys to be contracted with the EF mills for the deliveries during Q2 (April - June) will, as a matter of course, rise. Distributors are aiming at a raise of Yen35,000/ton for silico-manganese, and of Yen5,000 - 6,000/ton for ferrosilicon of which price in US$ has been comparatively stable

<> Ferrosilicon: Contracted prices have been basically unchanged. There seems a change in situation with the shipments of Chinese materials via Vietnam, due to the reportedly stricter investigation against the producers by the Chinese government rather than the border control, causing delays in arrival of the contracted cargoes shipped via Vietnam by two weeks or so.

<> Silico-manganese: Offer prices of Indian silico-manganese keep going up. Currently the offers are at more than US$1,350/ton CIF, while the contracted prices have been US$1,300/ton CIF or a bit more. This contracted price level is almost the same as seen in the same period of last year. The Indian producers recovered the level by putting big efforts during the past 12-month period. Compared with the price in December 2011 at US$980/ton CIF, the price increased by US$300 - 330/ton. The distributors in Japan therefore expect a big price rise for the deliveries to the EF mills during the coming quarter, helped by shortage of spot cargoes. If the price is finalized as the distributors expect, it will become over Yen130,000/ton, delivered to the plant. The EF mills are said to be trying to secure future needs beyond the Q2, as they foresee even higher prices in the future, but distributors are not ready to accept the proposal, considering the potential risks of such forward sale when it is uncertain which direction the price of the Indian material will go.

<> Charge chrome: The crisis of power supply by ESKOM, South Africa is apparently causing a big fear of short supply of ferrochrome in the near future, besides, stainless steel demand in Europe is recovering on seasonal factors. It is now certain therefore that the benchmark price for the Q2 will be revised to go up. The number of markup sellers expect to gain has been made gradually larger as the market situation changes in sellers' favor, and is currently US¢25/lb (for reference Q1 benchmark is US¢115/lb Cr for Europe), but the buyers are not prepared to accept it and indicating US¢15/lb markup instead, as the prevailing price of spot material in Europe is still US¢120/lb Cr ddp. Anyhow, market concern is now focused on whether the forecasted short supply from ESKOM's power buyback will last until winter in South Africa begins when the South African producers usually produce much less than usual by lowering operational rates to avoid using the high-cost winter power.

<> Low-carbon ferrochrome: Major suppliers are to present offers within a couple of days for Q2 (April - June) shipments to Japanese regular buyers. The offers are supposed to bear a price increase. Although nothing has been finalized yet, the price is expected to rise by US¢15 - 25/lb. The power problem in South Africa as mentioned-above is said to have made the low-carbon ferrochrome production at Samancor fully stop during March 4 through 6. For reference Q1 price in the offers for regular buyers was US¢205 - 208/lb Cr CIF.

<> Manganese metal: Offer prices slid to US$3,130 - 3,140/ton CIF reflecting slow demand for the metal. The contracted price in recent deals was already US$3,100/ton CIF. Lower-than-expected 200's stainless steel production and the softened LME nickel price are causing the weak atmosphere.
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last modified : Fri 23 Mar, 2012 [10:25]
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