It really surprises me how few investors in Australia understand alloy markets. Investors chase companies that will never make as much money as OMH does when metal prices are high. The profits now are staggering, FeSi prices aren't likely to plunge like iron ore prices either due to the limited number of producers and the cost and time for setting up. OM Sarawak is sitting in the box seat.
A record price for ferrosilicon ever in Europe.
"The spot price moved higher for the first time in three weeks, hitting a record high "
GLOBAL FERRO-SILICON SNAPSHOT: Low inventory levels in EU, US fuel price gains
Key data from Fastmarkets’ pricing sessions in Europe, China and the United States on Friday August 20. https://do not advertise external sites/Images/656/103073/Global%20ferro-silicon%20snapshot%2020-08-2021.jpg
China
General sentiment on the ferro-silicon price in China was stable while Ningxia, a small autonomous region in north-central China, continues to tighten controls on ferro-silicon production and suppliers’ offers were broadly steady.
Export prices have not changed much over the past week, with overseas demand remaining subdued.
Steel industry production cuts failed to meet original targets, underpinning the current high price.
A cooling in the previously elevated magnesium price, along with the high raw material costs, provided support to ferro-silicon at currently high levels even though deals and inquiries have been quite thin.
Europe
The spot price moved higher for the first time in three weeks, hitting a record high since Fastmarkets started assessing the market in January 1997.
Suppliers increased offer prices amid new tenders issued by steel mills, with one tender of more than 2,000 tonnes for delivery in the fourth quarter expected to be agreed at around €1,900 per tonne. Two European producers are competing for the tender, sources said. Another tender issued by a German steelmaker for 200 tonnes was also expected to be settled in the next few days, although there was no estimated price by industry sources.
Steel mills wanting ferro-silicon for October delivery next month will likely be forced to pay more than €1,900 per tonne due to European production being allocated mostly for fourth-quarter settlements.
Low levels of exports are being made available from traditional suppliers in Brazil, Malaysia and Egypt, while Ukrainian production has been increasing slowly and is mostly being sold to Eastern Europe and Italy.
European suppliers are also being tempted to sell into the US market, which is at least $3,000 per tonne (€2,567) in-warehouse, while container costs and freight rates are at record highs.
United States
The US ferro-silicon market continued to trend upward this past week, with tight supplies continuing to fuel price gains.
Availability of supply remains a concern among suppliers and consumers alike, with some suppliers unable to fulfill consumers' extra needs outside of contracted quantities.
Traders have been unable to secure material from overseas due to little availability from traditional import sources such as Brazil, Malaysia and Europe.
Market participants suspect prices will continue to run higher while these supply issues persist.
OMH Price at posting:
73.0¢ Sentiment: Buy Disclosure: Held
