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Market Trend of Import of Ferroalloy as of 31 May 2016
= Price of silicon metal drops drastically, and price of Mo continues rising =
The market trend of import of ferroalloy as of 31 May 2016 is as follows.

<> Silicon Metal = The price of silicon metal in China has shown a declining trend since the beginning of May and yet to hit the bottom. The prices of 5.5.3 and 4.4.1 grades as of May 31 are CNY9,400 - CNY9,600 per ton and CNY10,200 - CNY10,400 per ton respectively, which are down by as much as CNY1,300 - CNY1,400 and down by as much as CNY1,000 from the end of April respectively. As the cheap electricity rate for a full-water season will be applied in the main producing areas like Yunnan and Sichuan from June and many producers are anticipated to restart operation, the market price has been falling to a large extent in expectation of an increase in the supply volume. In addition to this, the movements of producers and trading firms to sell out the spot goods have spurred the falling price. Some market participants forecast the price will fall to around CNY9,000.

Also in the Japanese domestic market, both offer and contract prices have been lowered by a drop in the purchase price and a strong feeling of an anticipation of a price fall, and the contract price of 5.5.3 grade is down by US$160 from the end of April.

<> Ferro-silicon = Whereas the price of ferro-silicon with Si being 72% in China continues to decline gradually, the price of the product with Si being 75% stopped declining. This is partly because, as some of the ferro-silicon producers went on strike to ask for a decrease in the electricity rate in Ningxia Hui as one of the main producing areas, the production ratio became lopsided and the product with Si being 75% got scarce temporarily. On the one hand, as to the product with Si being 72%, the steel mills in China offer the June purchase price at being down by CNY150 - CNY250 from the prior month, which retracts the market price downward.

In the Japanese domestic market, the roundabout products via Vietnam is still scarce, and the demand for Chinese regularly exported products is increasing. For that reason, the regularly exported products are on the long side of the market and both offer and contract prices of regularly exported products maintained the same price as the end of April. On the one hand, as to the products distributed in the market, a surprisingly low price is sometimes offered in the tender because of cheap products imported via non-regular routes other than Vietnam and the discounting battle among shippers, but it seems the many cases have conditions that short cargoes, less Si content and variations in size can be overlooked. The prices of average products are about to be fixed within the range of US$900 - US$1,000.

The price of Russian product was lowered as is the case in the last time. Both offer and contract prices are down by US$20 from the end of April, which was partly due to a discounting battle with Chinese cheap products in addition to continuing weak ruble.

<> Silico Manganese = The offer price for export made by the producers in India continues declining, and US$790 - US$830 per ton becomes mainstream. The price competition has been taking place because many of the producers focus on the shipments to Japan, South Korea and Taiwan in addition to the retail price of imported manganese ore being hardened, for which the contract price in Japan also continues declining, and is down by as much as US$75 - US$120 from the end of April.

The price in China also continues to decline and is down by CNY400 - CNY450 from the end of April, which is equal to the price decrease of US$60 - US$70 in U.S. currency. Such reasons are provided for this price decrease as (1) The retail price of imported manganese ore is declining, (2) Anticipation of production cut of crude steel in China is strong and the demand for silico manganese is weak and (3) The production cost is expected to be reduced in anticipation of a cheap electricity rate for a full-water season being applied in the southern area. In the market, the price is thought to be down furthermore when major Chinese steel mills float a tender for June purchase, and some of the producers exert traction on the price fall by rushing to sell the products at a profit immediately. The export of Chinese silico manganese to Japan did not seem to be contracted this time, either.

<> High-carbon Ferro-chrome (including charge chrome) = Such arrangement seems to be going on as the price negotiation on the benchmark price of South African charge chrome meant for Europe in the period from July to September is scheduled to start after the middle of June. As far as the market situation on high-carbon ferro-chrome is concerned, there are multiple factors for price rise such as some of the producers in South Africa which are under business rescue reduce the production volume by a large margin in addition to the current spot price in China going up, for which the decrease in consumption of high-carbon ferro-chrome in the period from July to September when the stainless steel mills usually reduce the production has less power to push down the price, and many of the market participants anticipate the price to be up from the prior period.

For a reference, the situation of almost no trading of spot goods of high-carbon ferro-chrome having been clinched in Japan is going on.

<> Low-carbon Ferro-chrome = The trading in the spot market is thin also after the consecutive holidays, and there has been no big movement in both offer and contract prices. The price negotiation on the regular price in the period from July to September is expected to be commenced after the middle of June.

<> Molybdenum = According to the announcement made by the International Molybdenum Association (IMOA), the world production volume of molybdenum in the full year 2015 (January - December) was 515.0 million lbs (down by 11.0% from the prior year) and the consumption was 506.5 million lbs (down by 9.4% ditto). This was an oversupply of the products being 8.5 million lbs, and also a factor for flagging prices in 2015. The producers' production curtailment is anticipated to increase further in 2016, and the market price currently continues rising due to the procurement of the spot goods.

LME molybdenum price (cash seller and settlement) is US$15,300 per ton (= US$6.94 per lb), which remains unchanged.

<> Manganese Metal = At the present moment, the current main price in the Chinese domestic market is CNY9,800 - CNY9,900 per ton, up by around CNY50 from the end of April. Many of the market participants opine that this is a price rise for the purpose of adjusting the cheap price and the current price is a bottom one. There is no return in the export price, and the FOB price is maintained at around US$1,500. However, the retail prices of imported manganese ore and domestic manganese ore have begun to get weakened in the Chinese domestic market, and the focus now is on how this matter and the application of a cheap electricity rate for a full-water season will affect the market price.

In Japan, although the buying motivation by the customers is still weak, multiple shippers have begun to raise the offer price against a background of the purchase price having bottomed out. Besides, in regard to this movement, there are multiple contracts with the customers which have an anticipation of a price rise, and the contract price is up by around US$10 from the end of April.
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last modified : Mon 06 Jun, 2016 [12:44]
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