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Market Trend of Import of Ferroalloy as of 13 September 2019
= Recovery of demands in China, Japan and Europe gets delayed =
Since China will have the holidays of Mid-Autumn Festival from 13th to 15th of September and China National Day from 1st to 7th of October, the operating rates of ferroalloy producers and customers will go down during this period. While the trading in the market is centering on shipments and deliveries from mid-October onward, the customers which wish to have a delivery before October are sporadically seen to contract at a premium price.

The market trend of import of ferroalloy as of 13 September 2019 is as follows.

<> Silicon Metal = The main price of 553 grade in the Chinese domestic market as of September 13 is CNY10,700 to CNY10,800 per ton, the price of 441 grade is CNY11,500 to CNY11,600, the price of 3303 grade is CNY11,500 to CNY11,700 and the price of 2202 grade is CNY13,300 to CNY13,500, which shows there has been no big change since the end of August. In China, albeit the producers had a meeting at the end of August and the offer price in CNY rose after that, the domestic demand is still weak, and the factors for a further price hike are lacking. On the one hand, there has been no change in the price for export, either since the end of August. This is because the weak Chinese yuan in the foreign exchange which was going on at one point in time is making a recovery.

In the Japanese domestic market, the price went up because not only did the price in China rise at the end of August, but the U.S. dollar also became weak in the foreign exchange. As the users finished a tender for delivery during October to December, the number of contracts for spot goods is small, but the current price is up by US$20 to US$30 from the end of August.

<> Ferro-silicon = In Chinese domestic market, the price still continues to show a tapering down trend, and the market participants say that the oversupply in the market is going on and the price has yet to turn upward for such reasons as (1) Major steel mill's purchase price for September delivery is down by CNY200 to CNY300 from the prior month, (2) This steel mill's purchase took a round, (3) Major producer in Ningxia restarted production and (4) Small and medium-sized producers have no intention to adjust production. The price is unprofitable for the producer, but is not cheap enough to compete with some of Russian and Malaysian products and the production adjustment cannot be done, which leads to the market circumstance surrounding Chinese ferro-silicon being obviously worsened.

In the Japanese domestic market, the price competition between Russian and Malaysian producers occurred with the fact the small and medium-sized producer in Russia brought in the cheap products at the end of last month. The price of Chinese ferro-silicon was balanced out by weak dollar, and remains at the same level as the end of August. For reference, the impact from the damages of the facilities owned by steel mills and flooding caused by the typhoon which passed over the Kanto Area during 8th to 9th of September has yet to occur in the demand for raw materials.

The supply of Russian ferro-silicon spot goods is still tight, and the offer for October shipment was made meant for the spot market, but no contract was made and the price remains unchanged from the prior shipment (October shipment).

The producers of Malaysian ferro-silicon (OM Sarawak and Pertama Ferroalloys) focus on the production for long-term contracts and Europe, but such case is sporadically seen as the contract for September to October shipments meant for Japan was also made at a cheap price. There was a contract as shipments during September to October meant for the spot market whose price was US$50 to US$60 cheaper than Chinese products.

As to cheap products via Vietnam and directly from mainland China, the distribution in the Japanese domestic market cannot be seen.

For reference, the producer in Kazakhstan has lately been selling ferro-silicon in a positive way, and there is such a sign in the Japanese domestic market as the price-slashing war will be accelerated.

<> Silicon Manganese = The price of silicon manganese in the Chinese domestic market again strengthened the sense of a further price fall, and shows a tapering down trend. The current price is down by CNY100 from the end of August, for which the market participants provide such reasons as (1) Production volume is going up, (2) Prices of ores from overseas manganese mines meant for China as October shipment came down, (3) Port stock of Imported manganese ore exceeded 4 million tons and (4) Purchase Volumes by steel mills during September to October grow at a sluggish pace.

In India, the downward pressure on prices of silicon manganese is strengthened for such matters as the ore price from overseas manganese mines is lowered, and the recovery in the European and Asian markets gets delayed. The producer's offer price is pushed down by the producer whose selling motivation is strong, and the contracts at FOB price being less than US$1,000 have begun to increase.

As to Malaysian silicon manganese, OM Sarawak and Pertama Ferroalloys Sdn. Bhd. are producing, of which Pertama Ferroalloys now focuses on the production of JIS Standard 0 and 1 and the shipments based on long-term contracts. OM Sarawak seems to set the price meant for the spot market (CIF Japan) at a price which is up by around US$5 from Indian products.

In the Japanese domestic market, the demand grew at a sluggish pace and trading was thin since the recovery in production gets delayed and many of the steel mills are reluctant to increase the stock in the period for the settlement of accounts. The current contract price is in a state of being down by US$30 to US$50 from the end of August. Besides, the impact from the damages of the facilities owned by steel mills and flooding caused by the typhoon which passed over the Kanto Area during 8th to 9th of September has yet to occur in the demand for raw materials.

<> High-carbon Ferro-chrome (including charge chrome) = The state of no spot goods being traded meant for Japan is still going on. The negotiation on the long-term contract price in the period from October to December is anticipated to start in the latter half of September.

The price in China turned upward slightly in the latter half of August, but stopped rising since entering September. The current price of Inner Mongolian product is CNY6,300 to CNY6,600 per ton, unchanged from the end of August. The producer's offer price is firm, and the expectation of a price rise is voiced among some of the market participants, but the demand in October is unclear and the price is also uncertain.

<> Low-carbon Ferro-chrome = The demand has yet to make a recovery from a period for production curtailment in summer, and the trading in the spot market was thin. The price shows a tapering down trend, and is in a state of being down by U.S. Cent 1 per lb from the end of August.

The price of low-carbon ferro-chrome in China dropped slightly in the latter half of August, but turned upward since entering September. The customers which had a sense of supply instability due to power failure in Baotou, Inner Mongolia seem to have moved to buy.

<> Molybdenum = The price of molybdenum concentrates in China hovered at a high level, but a slight drop was seen since entering September. On the one hand, the price of ferro-molybdenum dropped slightly at the end of August, and gets stabilized in a state of remaining flat at the present moment. The demand for ferro-molybdenum is forecast to be sluggish from September onward as well, and the price can't be expected to go up.

The price movement of ferro-molybdenum in the European market during August to September is at a low level and stabilized. While the expected recovery in the demand gets delayed, there is a sign of production increase in the molybdenum production in South America, and an anticipation of a price fall gets strengthened.

<> Ferro-vanadium = The price in China got stabilized until early September, but showed a slight drop in the middle of the month, which is because the downward pressure on prices has been enhanced by the increased domestic production volume and increased market stock.

The price of ferro-vanadium in Europe has shown a slight increase sporadically since entering September. The price as of September 12 was up by US$0.30/kg from the end of August. Albeit the expected recovery in demand has yet to occur, the price is in a state of being pushed up by increasing price of vanadium pentoxide as raw materials.

In the Japanese domestic market, not only does the occurrence of the demand after the production curtailment get delayed, but the U.S. dollar also became weak, which leads to the state of the current price being down by 2.8% from the end of August.

<> Manganese Metal = The main price for domestic consumption in China as of September 13 is CNY11,300 to CNY11,400 per ton, up by CNY100 to CNY200 from the end of August and the export FOB price is US$1,610 to US$1,650, down by US$0 to US$10 ditto. The market participants provide such reasons for the above as (1) Such a state continued as the price stopped dropping, which created a sense of proper price, (2) Producers in Guangxi Zhuang (ranks second in the domestic production) and Guizhou (ranks third ditto) shut down the plant in the middle of September and (3) Some of the customers purchased the products to be delivered after China National Day. However, some of them analyze that the demand after China National Day has a strong sense of uncertainty, and although the price has a likelihood of coming down as a result of recovery in supply, the price has a low likelihood of going up due to drastically increased demand. As to the export, since the price meant for the major customer in South Korea (October delivery) was US$1,590, the downward pressure on prices was strong and as the producer's selling motivation which was in a hurry to have a realization sales was also strong, the price came down slightly.

In the Japanese domestic market, the information on the cheap price in the tender issued at the end of August became a downward pressure on prices, but the mainly the upper price was in a state of being pushed down because the lower price in China became severe and U.S. dollar became weak in the foreign exchange. The foreign exchange is in a state of U.S. dollar being weak, but the price of manganese metal is down by US$10 to US$20 from the end of August.
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last modified : Tue 24 Sep, 2019 [11:17]
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