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Market Trend of Import of Ferroalloy as of 15 July 2016
= Anxiety about FeSi supply comes up to surface, and molybdenum price continues declining =
The market trend of import of ferroalloy as of 15 July 2016 is as follows.

<> Silicon Metal = The price of 5.5.3. low-grade silicon metal in China rose slightly from the end of June, but the prices of other grades remained unchanged, and many of market participants see the present situation is where the price movement can't be expected. At least during July, the price movement is anticipated to be few.

In the Japanese domestic market, in addition to the aluminium secondary alloy industry as a major consumer having entered into the production curtailment period in the Summer time, many of the customers finished procurement covering until September delivery, and the trading of spot goods becomes thin. For that reason, the number of contracts is few and the price also remains almost unchanged from the end of the last month.

<> Ferro-silicon = In the Chinese domestic market, the production curtailment continues in Ningxia Hui as a main producing area, and many of steel mills raised the purchase price for July delivery from the prior month, which led to the increase in both offer and contract prices. The offer and contract prices of the product with Si being 75% are up by around CNY200 per ton and up by CNY100 per ton respectively. As to the export, some trading firms raised the offer price by around US$10.

43 persons being arrested at the end of June by busting the illegal export group has also affected the cheap products which are illegally exported directly from mainland China or via Taiwan. Cheap cargoes discharged at Japan, South Korea and Taiwan have been reduced drastically since entering July. Albeit the influence on the market price has yet to come up to the surface, some customers gave up a new purchase of cheap products and search for substitutes.

In the Japanese domestic market, there has been no specific movement in the price up until now. There also has been no movement in the contract prices of Chinese regularly-exported products, the products distributed in the market and Russian products. However, some shippers which handle Chinese regularly-exported products make a comment that the inquiry about the price based on an early delivery has increased sharply.

<> Silico Manganese = In India, the price for export continued declining in early July, but thereafter rebounded due to strong rupee, and at the moment are up by US$10 - US$15 from the end of the prior month. In Japan, the steel mills express reluctance at a price hike, but some steel mills have begun to accept the nearly equal price hike. As to Indian silico manganese, some market participants anticipate that, as the price of Australian manganese ore as August shipment is also down, the influence from a drop in the imported manganese ore will come up to the surface and the product price will get weakened.

The price in China hovers at the same level as the end of June and remains unchanged. The operational control was imposed on the production facilities for manganese-containing ferroalloys after the Ministry of Environmental Protection of the People's Republic of China made an inspection, and therefore the quantity distributed in the market decreased, which however was balanced out by a weak demand and a drop in the price of imported manganese ore as raw materials. The export of Chinese silico manganese to Japan did not seem to be contracted this time, either.

At the moment, the customers in Japan show a great interest in the commencement of silico manganese production in the Sarawak Province, Malaysia. Pertama Ferroalloys Sdn. Bhd. is scheduled to have a first tapping in early August, and Sakura Ferroalloys is scheduled to commence to ship products in the period from January to March in 2017. The commencement of production of silico manganese at OM Sarawak has yet to be fixed.

<> High-carbon Ferro-chrome (including charge chrome) = The price of high-carbon ferro-chrome for the period from July to September meant for Japan was fixed by being up by US Cents 16 per lb from the prior period on July 5. The price is US Cents 106 per lb. Major factors for this price hike are (1) Price hike in the Chinese domestic market, (2) Decreased production by South African producers and (3) Increase in consumption of high-carbon ferro-chrome arising from decreased generation of nickel-containing stainless steel scrap (SABOT).

On the one hand, in Japan, the situation of no trading of spot goods of high-carbon ferro-chrome having been clinched is still going on.

<> Low-carbon Ferro-chrome = The outlook for the demand for the period from July to September is anticipated to be up from the year-earlier period, but as the regular price of low-carbon ferro-chrome for the period from July to September was just fixed at the end of June, the trading of spot goods is thin. Besides, as the regular price remains unchanged from the prior period, there is no movement in the price of spot goods at the present moment.

<> Molybdenum = The prices of molybdenum oxide and ferro-molybdenum continued declining following the downward trend in June. As compared with the end of the last month, the prices of molybdenum oxide and ferro-molybdenum per kg were down by US$0.8 - US$0.9 and down by US$1.20 - US$1.35 respectively, and it doesn't seem at the moment that the prices will stop declining.

On the one hand, LME molybdenum price (cash seller and settlement) is US$15,250 per ton (=US$6.917 per lb), down by US$1,750 (=US$0.794 per lb) from the end of June.

<> Manganese Metal = In China, the price has had no movement since late May, and continued to hover at a bottom price. The heavy rain still continues in southern China, and many of market participants expect the electricity rate will be lowered, but partly because the advantageous application for the producers does not take place in the main producing areas except Yunnan, the increase in the supply volume in the market and the price drop arising therefrom have yet to occur. Many of market participants make a revised forecast that the situation will continue to be difficult for the price to go up also in August. On the one hand, the price for export also does not come down much owing to weak Chinese yuan contrary to the expectation in the market.

In the Japanese domestic market, as the steel mills and special steel mills have begun to use manganese metal instead of low-carbon ferro-manganese and silico manganese due to the price drop until June, the consumption was slightly up and the demand was also slightly recovered. Some shippers raise the sale price owing to this, but some shippers take a negative stance to raise the price, which leads to the difference between higher and lower quotations becoming bigger. Both higher and lower quotations of both offer and contract prices are up by US$10 per ton and down by US$10 respectively from the end of June.
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last modified : Mon 25 Jul, 2016 [11:44]
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