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Market Trend of Import of Ferroalloy as of 15 June 2016
= Prices of Chinese ferroalloys stop declining, and Mo price drops back =
The market trend of import of ferroalloy as of 15 June 2016 is as follows.

<> Silicon Metal = The price of silicon metal in China has at last shown a sign of having bottomed out since entering June. The prices of 5.5.3, 4.4.1 and 2202 grades after the consecutive holidays of Dragon Boat Festival (9th to 11th of June) remained unchanged from the time right before those holidays, and the only price of 3303 grade was down by as much as CNY200 per ton. In addition to the decrease in the market inventory in the main producing areas like Yunnan and Sichuan due to the customers' tenders which concurred in the beginning of June, the reduction range in the cost and the number of producers which restarted operation were smaller than expected, which seemed to prop up the market price.

As for the export, the prices of 553 and 441 grades are down by US$80 and down by US$50 - US$60 respectively from the end of May, but no small number of producers increase the offer price at the present moment.

In the Japanese domestic market, many of the major customers finished the contracts with shippers covering the purchase until September, the contracts made in the former half of June were relatively more. On the other side of the coin, many of the shippers are worried about the future sale becoming difficult. The current price is down by about US$10 from the end of May, but there were contracts with prices being a bit cheaper at the beginning of the month.

<> Ferro-silicon = In the Chinese domestic market, the spot goods are in a state of tight supply because of such reasons as (1) The production in Ningxia Hui as a main producing area was reduced during May, (2) Major producers in Inner Mongolia carried out the maintenance work, (3) The inventory levels in Ningxia Hui and Qinghai as a main producing area are low and (4) The explosion accident occurred at a ferroalloy plant in AnYang, Henan on May 31, and the distribution via AnYang became disordered. The supply of the product with Si being 75% was tight during May, but the feeling of tight supply of the product with Si being 72% is strong in June. For that reason, the producers show a strong attitude toward making an offer, and the main offer price is up by CNY100 - CNY150 per ton from the end of May. For a reference, many of major steel mills are purchasing the product with Si being 72% at a price of CNY4,550 - CNY4,600 per ton (including tax and delivered at plant), which is the same as the price in late May.

As the price goes up in China, many of the producers take a strong attitude toward making an offer as to the price for export. Because of that, the contract price of regularly exported products is up by up to US$5 from the end of May.

On the one hand, albeit the scarcity of roundabout products via Vietnam is getting serious as to the distributed products in the market, the cheap products via another route are expanding its share, and many cases of discounting battles with Russian products took place in the tenders issued by steel mills. There are prices dipping below US$900, which surprises the market participants.

As for Russian products, the price battle among producers also happens, and the price is down as is the case in the last time. Both offer and contract prices are down by US$20 from the end of May.

<> Silico Manganese = In India, in addition to the retail price of imported manganese ore continuing to drop, the price in the European market is on a weak note, and both offer and contract prices for silico manganese meant for Japan continued to drop. Some of the shippers are surprised at this price drop range. In Japan, partly because a cheap price is seen occasionally in steel mills' tenders in addition to a drop in a cost price, the contract price is US$740 - US$760, grossly down by US$50 - US$60 from the end of May.

The price in China stopped declining in the last week of May, and still remains unchanged even as of June 15. Such reasons are provided for this unchanged price as (1) Manganese ore imported at a high price during February to April is used as raw materials, (2) The supply volume decreased because the producers suspended operation due to flagging prices during April to May, (3) The electricity rate for a full-water season which began to be applied from June in some areas is not so cheap as expected and (4) Steel mills whose steel product price went up confined a cost price cut to a small range.

The export of Chinese silico manganese to Japan did not seem to be contracted this time, either.

<> High-carbon Ferro-chrome (including charge chrome) = The demand for high-carbon ferro-chrome in Europe, the U.S. and Asia is lower than the year-earlier period, but the demand and supply balance is analyzed to be in a state of tight supply due to decreased supply.

The price negotiation on South African charge chrome for the period from July to September has already started, and some market participants anticipate the negotiation to come to an agreement as early as the end of this week. Many of market participants expect the price for the period from July to September will be up from the prior period due to the decrease in the supply volume, but the opinions vary with regard to how much the increase will be, and it is difficult to organize the opinions.

On the one hand, the negotiation on the contract price of high-carbon ferro-chrome for the period from July to September is anticipated to move into high gear in late June, and many of market participants also anticipate this price to be up from the prior period. This is because the production volume of stainless steel does not go up drastically, but as the generation of stainless steel scrap decreases, the volume of high-carbon ferro-chrome to be used increases. The situation of no trading of spot goods of high-carbon ferro-chrome having been clinched in Japan is going on.

For a reference, "Benchmark prices of South African charge chrome meant for Europe" is added to the table from this time as a reference data.

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last modified : Wed 22 Jun, 2016 [09:44]
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