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US ferro-alloy markets peak in wake of Russia’s war on Ukraine

This market is paralyzed because the vast majority of [ferro-silicon volumes] are locked up under long-term contracts, which doesn’t allow or offer the traders liquidity to bring it here.
“The [ferro-silicon] market has settled down recently with buyers hitting the pause button after the original panic,” a supplier source said.
Prior to last week’s decline, resulting from a prolonged period of inactivity in the spot market, prices were at an all-time high of $3.65-4.00 per lb, up by 16.79% from $3.25-3.30 per lb on February 17.
While prices had already been elevated, due in large part to regional tightness resulting from significant global shipping and logistics issues, the Russian war shook up the ferro-silicon market further.
The loss of ‘most favored nation’ status has resulted in an additional 11.5% duty on Russia-origin ferro-silicon inputs arriving in the U.S.
The heavy US reliance on Russian ferro-silicon has led to significant concern in the market.
In 2021, the US imported 66,219 tonnes of ferro-silicon from Russia, representing 43% of the total 153,984 tonnes that have arrived in the US from overseas, according to US Customs data.
The dependence on Russia has been even more significant over the first three months of 2022, with the US importing 23,418 tonnes of ferro-silicon from Russia over the period, accounting for 51.67% of the 45,326 tonnes that have arrived in the US from outside sources.
While the market remained tight for prompt material, and concerns over the future supply chain continued, market participants have noted a lack of spot interest in recent weeks.