Market Trend of Import of Ferroalloy = Energy saving policies...

Market Trend of Import of Ferroalloy
= Energy saving policies expand, and unstable supply for ferroalloy accelerates in China =
Promoting energy saving policies is expanding from Inner Mongolia Autonomous Region in China. At the end of last week, Liaoning Sheng also announced establishing the energy use monitoring system. Promoting energy saving and weeding out the inefficient production facilities accelerates in each domestic area in accordance with the guidelines of the Central Government. Ferroalloy production, which consumes electricity in large quantities, is directly affected by this policies. Unstable supply intensifies in the market. At the same time, purchasing future contracts by speculators flowed in large quantities into the market, and it lifted up the product price. In addition to this, the Chinese market and the Asian and European market, which is on the road to recovery of raw materials consumption, scrambled for the product. The price increase of ferroalloy is expected to continue for a while because of the continuous shortage of containers and further increase of freight.
<> Ferro-silicon =
Because a tight supply at the major production areas, such as China, Russia, and Malaysia did not improve, the price increased further from the end of February. Delay of delivery and non-delivery sporadically occurred. Many of users, such as steelmakers and trading companies, struggled make efforts for confirming the delivery date and procuring the alternative product. Some contracts are concluded at an asking price by sellers.

The flow of production restriction at Inner Mongolia Autonomous Region in China, the largest domestic production area, accelerates, and a concern for supply intensifies from the end of February. In addition to this, speculators, who have a bullish sentiment, purchase future contracts in large quantities. The current market is led by the future contract price. On the other hand, the purchase of March contracts by the major Chinese steelmakers temporarily completed last week, but those prices are almost the same level as the recent spot price. As a result, it did not drastically affect the market.

The recent Inner Mongolian ferro-silicon prices with both Si being 72% and 75% are up by CNY400/ton from the end of February. Because the expected production volume cannot be confirmed, it is reported that even they are major producers, it is close to stop offer. But the ferro-silicon price in the future market began to decline after this week. It is because the deadline of settlement for the future contracts, which had been purchased in January and February approaches, and profit booking increased.

In terms of the domestic Japanese market, the consumption volume of ferro-silicon also increases in conjunction with the recovery of the operation ratio of steelmakers. The inventory in hand of some consumers, or steelmakers, becomes tight sporadically. But because the inventory sales of ferro-silicon made a huge loss in the past, there are still many trading companies, which hesitate it even now. The recent contract price increased by US$10 to US$60 from the end of February.

The ferro-silicon price (with Si being 75% product) in China is up by US$10 to US$20 from the end of February.

In terms of Russian ferro-silicon, the spot market is still tight. The spot product price, which is available for May shipment, increases by US$20 from the previous time, or April shipment.

Because the number of the infected people to the COVID-19 increases at the surrounding cities of the industrial park in Malaysia, there is a concern for production as the restriction for transfer is strengthened. But as of now, no trouble occurred. In terms of the current offer for May shipment, the contract price for Japan is up by US$60 from the previous time of May shipment.

<> Silicomanganese =
The ore price meant for China for April shipment by the major manganese mines increased across the board. Although the port head inventory volume of the imported manganese ore is still a high level, the contract price is lifted by the following reasons: (1) The price of silicomanganese increased in the domestic Chinese market; (2) Shipment of manganese ore has a trouble in South Africa by heavy rain; and (3) Freight increases continuously.

Inner Mongolia Autonomous Region, the largest silicomanganese production area in China, strengthened restriction for the production of ferroalloys last week. Because many of Chinese steelmakers completed offering price for March contract at the 1st week of March, at first, the market did not change drastically. But the price begins to increase again led by the future contract market as the possibility to reduce production in Inner Mongolia intensifies in the 2nd week. The recent price of Inner Mongolian 6517 product is CNY7,200 to CNY7,350/ton, up by CNY50 to CNY150 from the end of February. In terms of the export for Japan, there is no contract, though there is an offer.

In terms of India, in response to intensifying the demand for silicomanganese in the Asian areas and the Western countries and raising the price by overseas major manganese mines, the sellers are active for raising offer prices. Although only some contracts were concluded at a low price sporadically, the contract prices are gradually lifted.

In terms of Malaysian silicomanganese, OM Sarawak and Pertama Ferroalloys Sdn. Bhd. (Pertama) are producing. The contract price was slightly higher than that of the Indian products.

In terms of the domestic Japanese market, although the operation ratio of some steelmakers increases, the inventory in hand of other steelmakers becomes tight. There were contracts, which were concluded at relatively higher prices. The recent contact price is up by US$40 to US$50 from the end of February.



FeSi up US$250/t SiMn up US$300/t since end 2020 in the Japanese market.