Print article
The market tendency by item on imports of ferro-alloys into Japan at the 31st October of 2008 is as follows ;
* General view = Negative factors are running over the markets of raw materials and both of the strengthened exchange rate of Japanese Yen against US-Dollar and the cutback of crude steel production are putting most intense impact on the markets with the largest magnitude. The former is deteriorating the physical strength of importers by body-blow and the latter is becoming a trigger to thrust down Chinese producers and traders in panic. The exchange rate of Yen / US$ once strengthened to a level of US$1.00 : Yen 91 after an interval of 13 years but this strengthened Yen rate has played the role of causing unprofitable transactions at Yen prices for imports of ferro-alloys. The output of crude steel in China for September of 2008 had a decline of 9.1% and this aspect is multiplying an anxiety for the steel industry of China in the future and crushing a confidence at Chinese producers. In addition, steel companies of Japan headed by major blast furnace mills have decided to decrease their production of crude steel and, accordingly, it is supposed that these steel mills of Japan will postpone their new purchases of ferro-alloys to January of 2009 and afterwards.
* Ferro-silicon = Since traders overwhelmingly interpose in exports of ferro-silicon from China, they feel a sensitiveness of fluctuation for market price of ferro-silicon. The price level of US$1,300 – 1,350 per metric FOB China, including export duty of 25%, is thought to be the lowest line for its profitability. Originally, it is said that the profitable line for production of ferro-silicon in China will come to be US$1,100 – 1,200 per ton. A steep fall of price for Chinese ferro-silicon as arisen from the beginning of October is due to the fact that traders are in a hurry to sell their stocks of ferro-silicon at discounted prices, but the cutback of crude steel production in China is multiplying an anxiety for Chinese steel industry in the future.
* Silico-manganese = A loss for production of silico-manganese in China is currently estimated to have reached US$500 – 800 per ton. A cycle to use manganese ore purchased at higher prices as raw material for shipments in July – September quarter is now coming up for production of silico-manganese and, therefore, many of Chinese producers have been forced to reduce their production of silico-manganese or to dispose of the stocked cargoes. The market price of Chinese silico-manganese has fallen to a level of US$1,750 – 1,850 per metric ton CIF Japan at present and even Indian silico-manganese has entered into the category to be unable to compete with Chinese product. Many of Chinese producers have successively asked shippers to skip the contracts to import manganese ore for shipments in October – December quarter. In order to foresee an issue of the price movements, it will be necessary to wait a finish of adjustment for balance on supply and demand of silico-manganese in China through an autonomous operation.
* Charge chrome = South African charge chrome is now being offered at 100 US-Cents per lb. of Cr in Europe and sales of Indian product have been depressed but Indian offer is also on a level of 100 US-Cents in the same case as that of South African charge chrome. There is a strong view in the market that an expectation to have a recovery of stainless steel production will be carried over to the first half of 2009 and afterwards but even price of high carbon ferro-chrome (charge chrome), which is currently only the item of ferro-alloys to be profitable for its production, is falling to a lower level than 100 US-Cents per lb. of Cr to be not payable for cost. A bet to forecast the benchmark price of South African charge chrome to be settled for shipments in January – March quarter of 2009 is prevailing and the highest one to be anticipated is 150 US-Cents per lb of Cr CIF Japan.
* Manganese metal = Among ferro-alloys, electrolytic manganese metal is the commodity, having fluctuated its price to a tremendous extent, and the current price of Chinese electrolytic manganese is in the range of US$2,300 – 2,350 per metric ton CIF Japan, having had a considerable fall of US$700 per ton compared with that in the middle of October. Some of the parties concerned have an opinion that price of Chinese electrolytic manganese metal is now approaching the bottom level, but some of trading companies have still anticipated market price of US$2,000 per ton in the near future and, therefore, an issue of the price movements for this metal is still not clear yet. The cost to produce electrolytic manganese metal in China is estimated to be higher than US$3,500 per metric ton FOB and, unless it is possible to secure manganese ore from domestic mines as raw material at a substantially lowered price, this production will come to be a loss. According to an information from China, the current operation rate for production of electrolytic manganese metal has already dropped to 20% and, after the stocks of this metal are rapidly reduced, it is a danger to see a sudden and quick rebound of price for electrolytic manganese metal. Electrolytic manganese metal is now being used as raw material for production of medium carbon ferro-manganese and, if this usage is accelerated, it is anticipated that the de-stocking of this metal will progress on a high pitch.
* Silicon metal = Chinese silicon metal with 5.5.3 grade is being offered at US$1,980 per metric ton CIF Japan, having broken the level of US$2,000, but the tide of price for silicon metal is a slow and gradual fall. Because of no sudden and sharp rebound of price for silicon metal in the past years, price of silicon metal has formed the state of lower height of mountain against shallow bottom of valley and is on a basic tone to remain unchanged. The demand for silicon metal from the aluminum alloy industry of Japan was unable to surge for shipments in October – December quarter and, accordingly, the stocks of silicon metal at producers are plenty and a fall of price for silicon metal is coming up in spite of off-season time (price of silicon metal usually rises for drought).
* Molybdenum = The fundamentals on supply and demand of molybdenum have been viewed to be on a firm tone but molybdenum prices have moved to an unexpected direction. Namely, molybdenum prices have fallen to a large extent. In order to dispose of the stocked molybdenum cargoes (products and ores), producers and converters are in a hurry to sell these cargoes and, consequently, prices of ferro-molybdenum and molybdenum oxide have now fallen to a considerable extent. The current prices are in the range of US$51 – 53 per kg. of Mo CIF Japan for ferro-molybdenum and US$23 – 24 per lb. of Mo CIF for molybdenum oxide respectively but price of molybdenum oxide has a big probability to fall soon to a lower level than US$20 per lb. of Mo. Many of new projects to develop molybdenum deposits are estimated to be US$15 – 20 per lb. of Mo as cost to produce molybdenum oxide. Therefore, new molybdenum projects have a possibility to be influenced by a fall of molybdenum prices as mentioned above.
* Ferro-vanadium = Owing to a series of bearish mood on base metals and a decline of actual demand for metals, price of ferro-vanadium has fallen to a large extent. Dealers are now offering ferro-vanadium at US$40 – 45 per kg. of V CIF Japan. Price of ferro-vandium has successively fallen from the middle of October and finally has had a fall of US$20 per kg. of V in total for the last two weeks. Even though price of ferro-vanadium fluctuates largely, the current price of this ferro-alloy has had a steep and considerable fall since July – September quarter of 2005, when the soared price was rectified and had a sharp fall. – TEX Report