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Market Trend of Import of Ferroalloy as of 28 April 2017
= Chinese market rebounds in final week of April because Ministry of Environmental Protection begins inspection =
In the final week of April, the Ministry of Environmental Protection (MEP) began a one-month inspection in a total of 7 provinces and cities such as Tianjin, Shanxi, Liaoning, Anhui, Fujian, Hunan and Guizhou. On the one hand, in the U.S., the imposition of antidumping duty (AD duty) on South Korean ferro-vanadium is about to be decided, and there was a movement that the survey on AD duty on imported metallic silicon started. Any of those is connected to the price fluctuation, and the careful attention may have to be paid on the market trend during May.

The market trend of import of ferroalloy as of 28 April 2017 is as follows.

<> Silicon Metal = The price movements in the Chinese domestic market were a few during April, and maintained the situation of being unchanged from the middle of the month. But, there is an anticipation of a price fall because many of the market participants forecast that a cheap electricity rate for a full-water season will be applied from May in Yunnnan and Sichuan. In Fujian intended for the inspection by MEP, the shut-down of the silicon metal plants has been expanding since around April 20. However, as what is produced in Fujian is mainly premium products, they have no positive effect to raise the prices of 553 and 441 grades. Some of the suppliers reduced the offer price of 553 grade meant for export by US$10 per ton from the middle of April.

In the Japanese domestic market, the customer's buying motivation is low due to lots of in-hand stock, and the trading in the spot market is thin. The current contract price of 553 grade is down by around US$20 from the end of March.

For reference, the survey on AD duty started on silicon metal imported from 4 countries in the U.S. and the one imported from 7 countries in Canada. The possibility also comes up to the surface that the price will drop sharply in other markets because of the products which avert the U.S. market.

<> Ferro-silicon = In the Chinese domestic market, the price continued declining slightly from the beginning of April to late April, but stopped declining in the final week. This is because the purchase volume of ferro-silicon increased due to recent rebound in the price of silico manganese in addition to the demand and supply balance being improved by production adjustment caused by a price cut. The impact on the main production areas for ferro-silicon from MEP's inspection is analyzed to be minor. The current price of product with Si being 75% of Inner Mongolian origin is CNY5,500 - CNY5,700 per ton, down by CNY400 from the end of March. The price for export is down by around US$30 (FOB) because of being affected by a drop in the price for domestic consumption.

The contract price of Chinese regularly-exported product in Japan is down by around US$30 from the end of March.

As to ferro-silicon illegally exported from China, albeit there was an atmosphere that the quantity would increase again during January to March this year, there is a report that busting illegally-exporting group in a large way took place in Mainland China in late April.

As to Russian ferro-silicon, the spot goods are still tight, and the shipment of the cargo for a new offer was shifted to June - July. The contract price meant for Japan continued to decline slightly since entering April, and the current one is down by US$15 - US$20 from the end of March.

As to Malaysian ferro-silicon, the shipments are being made increasingly to the Asian market like India and the U.S. market where the high price is maintained while averting the shipment to the Japanese market where there is a strong mood for a price cut. The contract price meant for Japan is down by around US$20 from the end of March.

During April, almost no cheap product was seen in the spot tender floated in Japan.

<> Silico Manganese = In the Chinese domestic market, the price continued declining with the coming of April, but rebounded in the final week and the current price made a recovery to the same level as the end of March. This was because the production and supply of manganese-containing ferroalloys are anticipated to be cut and become tight due to MEP's inspection which started in Hunan, Guizhou and Shanxi (The production of silico manganese in each province ranks second, third and eighth). The futures price of silico manganese sold in Zhenzhou Commodity Exchange in March dropped sharply during April, which shows a state of backwardation of the futures price being cheaper than spot price, but what happened this time may normalize the situation. However, there are such finite factors for a price reduction as a cheap electricity rate for a full-water season will be applied in Yunnnan and Hunan from May. The situation that almost no contract meant for Japan has been made is ongoing.

As to Indian silico manganese, many of the producers raised the offer price for the reason that (1) Overseas mining companies raised the price of manganese ore, (2) The price of silico manganese goes up in the Indian domestic market and (3) Silico manganese in the European and U.S. markets maintains a high price. For this reason, the contract price of Indian silico manganese in the Japanese domestic market is up by US$30 - US$50 from the end of March.

As to Malaysian silico manganese, the shipments to USA and Asian countries other than Japan are going up in the same manner. Manganese-containing ferroalloys produced by 3 companies in the Samalaju Industrial Park during April are silico manganese produced by 2 companies (a total of 4 electric arc furnaces) and high-carbon ferro-manganese by 1 company (2 electric arc furnaces), of which silico manganese meant for Japan seems to be contracted at almost same price as Indian one.

<> High-carbon Ferro-chrome (including charge chrome) = The situation of no trading of spot goods of high-carbon ferro-chrome having been clinched is still going on in Japan.

On the one hand, the price in the Chinese domestic market continued declining after peaking in the latter half of March. The price of high-carbon ferro-chrome of Inner Mongolian origin for domestic consumption was down by CNY900 from the end of March, but the retail price of imported chrome ore hovers at a high level.

<> Low-carbon Ferro-chrome = Trading in the spot market is thin, there is no price movement and the contract price continues to be flat from the end of March.

<> Molybdenum = Workers' strikes at Toquepala mine and Cuajone mine (both are a copper and molybdenum mine) began from April 10, but came to an end on April 23. The impact on molybdenum production is analyzed to be minor, but the price of molybdenum dropped slightly in the final week of April. As the price continued rising slightly until the middle of April, the current price is still high as compared with the end of March, but many of the market participants forecast the price will continue declining slightly for a while in the future. In the Chinese domestic market, the prices of molybdenum concentrates and molybdenum oxide were held unchanged from the middle of the month, but the price of ferro-molybdenum was down by CNY1,000 - CNY1,500 per ton.

On the one hand, the LME molybdenum price (cash seller and settlement) on April 27 was US$15,250 per ton (=US$6.917 per lb) and continued to be flat from late October.

<> Ferro-vanadium = U.S. International Trade Commission (USITC) resolved the imposition of antidumping duty on South Korean ferro-vanadium to be affirmative, and the final decision supposed to be made by U.S. Ministry of Commerce at the end of May has been just awaited. For this reason, the price which spiked sharply in the former half of April begins to drop back in some areas.

<> Manganese Metal = The price of manganese metal in China begins to rebound at the present moment, which is due to the fact MEP will enter Guizhou and Hunan for inspection over a period of one month from April 24. As well as both being a main production area for electrolytic manganese metal, Guizhou has the biggest manganese ore reserve within the country and the supply of products is anticipated to become tight during May due to shut-down of plants and mines. For this reason, major producers begin to raise the offer price, and it is not uncommon that the offer price is raised by US$100 - US$200 from the end of March. Albeit the offer prices for export submitted by traders are up by US$10 - US$20 from the middle of April, some of them are still cheaper than those at the end of March.

However, Japanese trading firms feel uneasy about non-delivery of the cargoes which was contracted at a cheap price under the situation of an anticipation of a price hike in the market and cargo contamination, and take precautions against cheap products.

In the Japanese domestic market, as the price of manganese ore in a short term is recognized to be in anticipation of high prices, the price of electrolytic manganese metal won't easily drop further, and the contract price is up by US$50 - US$70 from the end of March partly owing to a price hike made this time in China.

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last modified : Wed 10 May, 2017 [10:00]
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