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Japan Ferroalloy Market Report - September 14, 2012
= Importers' concern gradually growing about China's reaction to the Senkaku Islands issue =
Summary of the market situation of ferroalloys in Japan as of September 14 is as follows.

<> Summary: The export restriction of rare-earths enforced two years ago as a counter-measure against Japan on the Senkaku dispute is said to have not worked as China originally planned and that such export restriction will not work anyway in the long run. Therefore it is observed that there is only a small possibility of another restriction in exports of, maybe this time, steel-making raw materials, although some distributors are seriously on the alert for the even a small possibility. Japan's reliance on China in imports during the first half of 2012 was, <> ferrosilicon: 57.2% of Japan's total imports, <> silicon metal: 79.7%, and <> manganese metal: 78.1%. Importers and distributors are actually trying to secure as much quantity as possible in stock for emergency and also to have the contracted cargoes shipped as soon as possible. On the other hand in China, major ferroalloy producers are to get together holding a nation-wide conference on October 18 and 19 in order to promote sales, domestically and to the world, of Chinese-made alloys by saying therir supply is stable and their prices are competitive. The issue on the islands may turn out just no worry on the alloy/metal trading business.

<> Ferrosilicon: Apart from the Senkaku issue, the market is still weak, keeping it a buyers' market. The price of Chinese origin, the most commonly offered, is currently US$1,340 - 1,350/ton CIF, which merchants/distributors regard as a start line for negotiation, as Chinese domestic demand is quiet and sellers may want to sell out from stocks relatively cheap before the mid-autumn harvest festival.

<> Silico-manganese: Current offers of Indian origin are at US$1,120 - 1,130/ton CIF. There is information that a deal was done at US$1,150/ton for Europe, based on which sellers are bullish and will be for some time. On the other hand buyers in Japan, having an enough quantity in stock, are taking a wait-and-see attitude. There seem no actual deals done so far yet.

<> Charge Chrome: With regard to the benchmark price for the Q4 (October - December) of 2012, the direction is basically downward without specific forecast about how low it will be. If it is cut for the Q4 again, it means a drop in two consecutive quarters. Current spot offers are US$0.95/lb ddp for Europe, US$0.89 - 0.92/lb CIF China, and US$0.89 - 0.94/lb CIF Japan.

<> Low-carbon Ferrochrome: Trend of the price for the Q4 (October - December) is also downward. The offers presented in the tender held late August by steel mills were reportedly US$2.06 - 2.09/lb CIF for C<0.1%, which are the basis for Q4 negotiations. Sellers may have to in the end accept a certain discount at the final stage of negotiation.

<> Molybdenum: On short-cover buying by traders since late August, market is firming together with a sign of rise in demand in Europe after the summer vacation. As there has been basically no change in the supply/demand situation, meaning the oversupply situation continues, the upward trend based on only the short-covers will be short-lived towards the year-end or even earlier. According to an industry source, there was an actual deal last week at US$13/lb in Europe without followers. Current offer prices in Japan of molybdenum oxide are US$11.50 -12.00/lb CIF.

<> Silicon Metal: The price of silicon metal (5.5.3 grade for aluminum alloy making) of Chinese origin for the Q4 (October - December) stays unchangedly low at US$2,100/ton CIF.

<> Manganese Metal: There has been no change in the market after the price cut of the ores announced by a major miner for October shipments to China. The favored power rates in China applicable to heavy users, i.e. special low rates in Guangxi (during September and October) and in Yunnan (the applicable period was extended by two months until November), have not been reflected to the suppliability yet, keeping the price as relatively low as it has been.
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last modified : Fri 21 Sep, 2012 [11:55]
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