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Japan Ferroalloy Import Market Report - February 15, 2013
= The prices for bulk ferroalloys to be delivered to EF mills during March depend upon Yen/US$ rate changes =
The market situation in Japan of ferroalloy imports as of February 15 is as follows.

<> Summary: Traders and distributors are watching the market at this moment to see which direction the current exchange rate fluctuations (of Yen against US$) are basically heading for, hesitating to offer ferrosilicon and silicomanganese to EF mills for deliveries during March. Given the current gradual uptrend of the prices of Chinese ferrosilicon and Indian silicomanganese, those sellers seem not fully ready to take a risk of loss-making possibilities under the uncertainty about the exchange rates and the market price trend in US$. The quantity for March deliveries are limited, as the mills already bought some of their needs through quarterly contracts. However, the prices for March will definitely affect the prices to be concluded for the Q2 (April - June) contracts, making the sellers somewhat nervous.

The prices with the EF mills for deliveries during February in monthly contracts rose by Yen10,000/ton compared to those for January for ferrosilicon and by Yen7,000 - 9,000/ton for silicomanganese. It is forecast that, based on the current price-determining variables, the prices for March deliveries will rise by more than the rises reflected to the February prices as mentioned-above. This situation is obviously making both the sellers and the mills take wait-and-see attitude.

<> Ferrosilicon: There has been no big change in the market since February 9 due to the Chinese New Year holidays. The offer prices before the holidays slightly rose, as the low-priced offers had disappeared already. The offers were mostly for shipments during the second half of March, meaning no cargo availability for February shipments. Although the prices in China for domestic users are steadily rising, the prices for Japan are not reflecting the price uptrend because of the strong resistance from Japanese consumers to accept price rises due to the weakened Yen. Lower-priced offers of the materials exported from China through third countries such as Vietnam seem increasing based on the looser export control during the holidays, being another reason of the pressure over the prices in Japan..

The price for Russian material followed the move of the prices for Chinese origin material as it did late January, i.e. offers and the contracted price both slightly rose.

<> Silicomanganese: Offer prices for Indian materials a little rose at the end of January, while the actually contracted prices stayed unaffected due to a little lower-priced offers of the material from inventory in Japan. Market sources regard the low offers as transient because the materials offered from the inventory were imported when Yen was stronger, and will disappear soon.

Offer prices for Chinese materials to domestic consumers in China rose before the holidays based on the announced rise of the prices of the manganese ore shipped in March, but the current level of price in China is a bit too high for Japanese consumers to buy.

<> Charge Chrome: There has been no progress in the talks for the benchmark price for the Q2 (April - June) of 2013, while Xstrata, Eti Krom and ENRC were visiting Japan to meet with customers mid/late-January or early-February. In the meantime, it is becoming more likely that ESKOM will have to ask for extension of the expiry of the power buyback agreements beyond end-March. If extended, the South African smelter will be unable to accumulate enough stock for their winter curtailment, and supply of charge chrome will continue tight, causing an unexpectedly longer period of shortage, a market source says. No spot deal has been reported.
last modified : Thu 21 Feb, 2013 [10:58]
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