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Market Trend of Import of Ferroalloy as of 15 March 2019
= Ferroalloy is in expectation of further rise throughout world due to rising market in China =
The economic-stimulus policy China indicated in the National People's Congress held during 5th to 15th of March) promises the increased steel demand including infrastructure investments, and the prices of some of the ferroalloys in the ferroalloy industry show a sign of a price hike in anticipation of an increase in consumption from April onward. Besides, the move to prop up the price has become noticeable throughout the world as well in expectation of the supply becoming tight.

For reference, Premier of China Li Kegiang announced the value-added tax (from 16% to 13% for the manufacturing industries) on March 15. The time for enforcement is not yet in sight, but the ferroalloy prices meant for domestic consumption and international export which have no refund of the value-added tax will be affected.

The market trend of import of ferroalloy as of 15 March 2019 is as follows.

<> Silicon Metal = The main price of 553 grade in the current Chinese domestic market is CNY11,300 to CNY11,400 per ton, down by CNY200 from the end of February. The prices of 441 and 3303 grades continue to be flat from the end of February. Since the price is slumping, the operating rate in the southern area came down, and in spite of the decreased production volume, the production in Xinjiang Uyghur Autonomous Region (ranks first in domestic production) is firm, and there is no sense of the supply being tight.

On the one hand, the higher export price in the overseas market becomes severe, and the prices of respective grades have no big change from the end of February.

In the Japanese domestic market, the tenders for procurement during April to June floated by customers have finished as a whole, and the trading in the spot market has become thin. The current price of 553 grade has no big change from the end of February.

<> Ferro-silicon = The price in the Chinese domestic market is stable after having bottomed out, and there is a strong anticipation of a price rise with a focus on the futures market. The market participants provide such reasons for the above as (1) Demand is expected to go up thanks to recovery in crude steel production from April, (2) Steel demand is also expected to be up thanks to the economic-stimulus policy indicated in the National People's Congress, (3) Consumption of ferro-silicon is expected to go up thanks to a substitute demand as a result of decreased production of silico manganese in Ningxia and (4) Producer's in-hand stock is at a low level. For this reason, a major producer fixes an aggressive price, and is said to be positive in raising the offer prices for the products with Si being 72% and 75%. However, the operating condition of ferro-silicon producers is firm, and as there is no sense of being tight at the moment, the price increase doesn't seem to come up to the surface.

In the Japanese domestic market, the steel mills floated a tender this week, and the information on cheap prices was conflicting in the market since there was a closing bid at a low price. However, as the producers in China are aggressive as mentioned above, it is difficult to purchase the products at the same price as this closing bid price, and other contract prices are slightly up as a whole. The current spot price is up by US$20 to US$40 from the end of February.

The producers of Malaysian ferro-silicon (OM Sarawak and Pertama Ferroalloys) focus on the production for long-term contracts and Europe, and as to the spot goods for March shipment, there was a contract concluded at the same price as Chinese product.

As to cheap products via Vietnam and directly from mainland China, the distribution seems to continue to be at a low level due to Chinese New Year, etc.

<> Silicon Manganese = The price in the Chinese domestic market is in a strong anticipation of a price hike for such reasons as (1) Consumption of silico manganese will go up thanks to a recovery in the crude steel production from April, (2) Order to suspend operation is made to electric arc furnaces with a capacity below 20,000 tons in Ningxia, (3) Supply of electricity will become short due to a large-scale maintenance an electric transmission company in Inner Mongolia will do during April to May and (4) Overseas manganese mines raise a price for April shipment. Such matter happens as the producers expecting a further rise are reluctant to sell, and in case of a full-scale supply shortage and a price hike, some of the trading firms are thought to import silicon manganese from India, etc.

In India, the price of silicon manganese doesn't go up smoothly against a strong rupee and increasing production cost, and the producers shift production products to 6014 product meant for domestic consumption, which is because the crude steel production in India is strong, and the domestic manganese ore can be used as raw materials. For this reason, the producers for export-oriented 6517 product are being limited, which leads to an increase in the offer price.

The price in Japan is being pushed up by being affected by the price condition of Indian product, but cheaper than the price in the markets in other countries. It is told that some of the overseas silicon manganese producers reduce the sales volume to Japan because the quality standard required by Japanese steel mills is strict as well as for the purpose of avoiding a price competition. The contract price is up by US$15 to US$20 from the end of February.

As to Malaysian silicon manganese, OM Sarawak and Pertama Ferroalloys Sdn. Bhd. are producing, and the price seems to be at the same level as Indian products.

<> High-carbon Ferro-chrome (including charge chrome) = The state of no trade of spot goods meant for Japan being made is still going on. The negotiation for the period from April to June of the long-term contract is forecast to start in the middle of March, and the producers expect the effective factors for a price hike will be strengthened in the future for such reasons as (1) Shortage of electricity is going on, (2) Electricity rate will be raised from April and (3) Price hike in the Chinese domestic market. On the one hand, the customers expect such reverse developments to the producers as (1) Resolution of electricity shortage, (2) Increase in electricity rate will not be approved and (3) Price drop in the Chinese domestic market, and both parties seem to have delayed the commencement of negotiation each other.

The price in China has continued to rise slightly since the end of February, and the current price is up by around 1.5% from the end of February. The market participants provide such reasons for the above as (1) Electricity shortage is anticipated to occur because the electric transmission company in Inner Mongolia will do a large-scale repair work during April to May, (2) Price of semicoke continues rising and (3) Major mill, Tsingshan Iron & Steel's purchase volume is firm.

<> Low-carbon Ferro-chrome = The supply and demand balance is stabilized in the Japanese domestic market, and the current price is up by U.S, Cents 1 from the end of February. Although there is a difference in qualities, the impact from the increased price of Chinese product pushes up the entirety (to be mentioned later). The negotiation on the regular price for the period from April to June seems to start from the last week of March.

On the one hand, the price in China turned upward at the end of February and continues rising slightly. Because of the forecast about electricity shortage (during April to May) in Inner Mongolia (ranks first in domestic production) as a factor to raise prices of high-carbon ferro-chrome and silicon manganese, the traders' purchase expecting a decreased supply and price hike has pushes up the market price. The current price was up by 6.3% to 9.3% from the end of February.

<> Molybdenum = The consumption of ferro-molybdenum meant for the steel industry in China has remained to dip below 10,000 tons monthly since last October. The consumption of ferro-molybdenum is at a low level in March as well, and the purchase price submitted by the customer is down by around 8% from the one asked by the producers which wish to raise the price. However, since there are many producers which are reluctant to sell at a low price, the market is in a state of the trading being thin.

The price in the European market has continued rising even since entering March, and the upward trend on a price of ferro-molybdenum lost traction more than molybdenum oxide. The price of molybdenum oxide was up by 0.8% to 2.6% from the end of February and the one of ferro-molybdenum was up by 0.2% to 0.6% ditto.

<> Ferro-vanadium = The price of ferro-vanadium in the Chinese domestic market has turned upward since entering the latter half of February and continued rising slightly even in early March, but dropped back in the middle of the month. The market participants provide such reasons for the above as (1) Steel mill's purchase during April to May in the Chinese domestic market has got delayed, (2) Price of vanadium slag dropped and (3) Price in the European market shows a downward trend. However, the price is in a state of being up by around 2.5% from the end of February.

Not only was the price meant for Japan also pushed down as a whole by being affected by Europe, but also the lower price of Chinese cheap product dropped by a large margin.

<> Manganese Metal = The main price in the Chinese domestic market as of March 15 is CNY13,000 to CNY13,200 per ton (down by CNY100 from the end of February) and the export FOB price is US$1,930 to US$1,950 (down by US$10 to US$20 ditto). While the possibility of a decrease in supply was resolved as Nsuta manganese mine in Ghana restarted operation, there is a forecast that the sales price of ores from this mine will go up, which did not lead to a massive drop in the price.

Albeit the demand in Japan was still at a low level and the trading was thin, the contract price is in a state of being down by US$20 to US$30 from the end of February.
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last modified : Mon 25 Mar, 2019 [10:45]
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