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| Update on Japanese market tendency on ferroalloys imports - 07 Sep, 2010 | ||
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TEX reported that the market tendency by item on imports of ferroalloys into Japan at August 31st 2010 is as follows: General view The central government of China Ministry of Industry and Information Technology is scheduled to enforce the regulations to scrap down the facilities for ferroalloys from the end September of 2010 and the government of Ningxia Hui Aut. Region has implemented in advance from August the works to expose small plants for production of ferroalloys and to select the facilities for ferroalloys, which were so far looked over. Therefore, the quantity of Chinese ferrosilicon to be supplied will be supposedly reduced accordingly. These plants are smaller than medium and small plants, which are 143 companies as specified by the Central Government of China to scrap down their facilities for ferroalloys, and have been producing ferroalloys as subcontractors or secondary subcontractors on behalf of major producers in many cases. This aspect is the reality to cause to feel strongly a depth of the ferroalloy industry in China. Ferrosilicon The plant, located in Ningxia Hui Aut in China, having had the capacity to produce 800,000 to 1,000,000 tons per annum of ferrosilicon, has been ordered by this local government to scrap down part of their facilities and, therefore, it is marked how extent does this arrangement influence on the supply of ferrosilicon from this plant. According to the latest information, the output of ferrosilicon at this plant is supposed to be reduced by 50% to 80% of the nominal capacity. It is clear that this reduction in production of ferrosilicon causes a decline of the capacity to supply ferrosilicon, and a major supplier of ferrosilicon in Ningxia Hui Aut. Region is now moving to purchase ferrosilicon from producers in such other main bases as Inner Mongolia Autonomous Region, and so on in the process of an interior accommodation. By taking this opportunity, price of Chinese ferrosilicon has bottomed out and the current price of this ferroalloy offered from China for export is higher than USD 1,400 per tonne CIF Japan, having risen by USD 20 to USD 30 per tonne from the bottom. Domestic price of ferrosilicon in China is CNY6.450 per tonne at present by a rise of CNY50 per tonne. Silicomanganese The discounted price of Indian silicomanganese is currently USD 1,350 per tonne CIF Japan, having fallen by USD 30 per tonne from that in last time. This fall of price for Indian silicomanganese is supposed to have included a reduction of price for manganese ore as raw material for production of silicomanganese but this offensive to sell silicomanganese at a discounted price as taken by Indian side is not understandable at Japanese side, because even the price of USD 1,380 CIF so far offered from India is enough competitive with the current price of Chinese silicomanganese and is able to maintain the advantage against Chinese product. The current price of USD 1,450 per tonne CIF Japan for silicomanganese offered from China as the best is still USD 100 per ton higher than that of Indian silicomanganese and a further reduction of price for Indian product has caused to weaken a basic tone on the market in Japan. For a reference, the case, having contracted a substantial quantity (1,000 tons) of Chinese silicomanganese at USD 1,450 per tonne CIF Japan for shipment in bulk, has been materialized and it is thought that the charges to import Chinese silicomanganese into Japan for shipment in bulk are estimated to be saved more on net base in comparison with shipment in containers as applied to export of Indian silicomanganese. Charge chrome Since the domestic price of high carbon ferrochrome in China has bottomed out, a whole mood of the price is changing. A rumor, which major traders are moving to purchase high carbon ferrochrome for forward shipments with an aim to sustain the price of Indian product, is spreading over the market and, therefore, price of high carbon ferrochrome is being felt to bottom out. In anticipation of that price of high carbon ferrochrome will bottom out soon, major stainless steel companies in overseas countries have rather positively received the spot offers at discounted prices (lower than 107 US Cents per pound of Cr CIF) and, as far as the price is concerned, it seems to be unlikely to have stabilized the bottom line of price for high carbon ferrochrome (charge chrome) on short term. Accordingly, in order to ascertain whether this mood, having touched the bottom price, is able to become a power to revise or to push up the benchmark price or the actual price to be contracted for shipments in October to December quarter or not, it will still need to have a certain time. A differential between the benchmark price and the actually contracted price has enlarged (supposedly approximately 20 US Cents per pound of Cr) for shipments in July to September quarter but, as regards that for shipments in October to December quarter, in addition to a rise of the benchmark price, it is essential to rise the price to be actually contracted. Low carbon ferrochrome It is still too early to take place the negotiations with regular consumers in Japan on price of low carbon ferrochrome for shipments in October to December quarter. Spot price of low carbon ferrochrome with carbon 0.1% maximum is in the range of 192 to 195 US Cents per pound of Cr CIF Japan at present without a considerable change. Manganese metal Reflecting a trouble in production of electrolytic manganese metal in China, domestic price of this metal has inclined to have a higher level and has actually risen to CNY 16,000 to CNY 16,200 per tonne by a rise of CNY 700 per tonne from that in the middle of August. In order to ensure a safety in operations and to cope with environmental pollution in Huayuan district of China, the authorities concerned has been continuing their inspection of these matters and the activities have become the factors to disturb the production of electrolytic manganese metal in this district. The parties concerned have a view that this aspect is anticipated to continue by an early part of September. Accordingly, the supply of Chinese electrolytic manganese metal will have tightened. On the other hand, reflecting the circumstances in China as mentioned above, the price of electrolytic manganese metal for export offered by Chinese shippers is on the way to rise further. Most of Chinese shippers have at once offered electrolytic manganese metal at USD 3,000 to USD 3,050 per tonne FOB, having risen by USD 100 per tonne from that prevailed in the middle of August. However, the buyers in overseas countries have still left their objection to this sharp rise of price for Chinese electrolytic manganese metal. Namely, these buyers are still resisting the offer at around USD 3,000 per tonne and have been interested in spot cargoes of this metal to be offered sporadically at discounted prices. In view of the fact that the total quantity of Chinese electrolytic manganese metal stocked at warehouses in Europe for sales have decreased to a low level, a change of the circumstances in the European market has to be marked. Silicon metal The problem of duty evasion on export of Chinese silicon metal has arisen and a suspicion of this duty evasion has been placed on exporters in Amoy district of Fujian province, having caused a confusion in the market. The shipments of Chinese silicon metal are not totally stopped but being effected partially. However, the investigation of this suspicion by customs offices is being enlarged to the whole of Amoy district and, therefore, this matter is not negligible to put an influence on price of Chinese silicon metal for export. The current price of Chinese silicon metal with 5.5.3 grade is USD 2,300 per tonne CIF Japan, having risen by USD 150 per tonne as compared to that in an early part of August. Molybdenum The price of molybdenum oxide offered by dealers is still in the direction to rise further and gradually. Chinese side has taken an attitude to export more molybdenum. Dealers are now offering molybdenum oxide at USD 15.75 to USD 15.10 per pound of Mo CIF Japan. (Sourced from TEX Report Limited) | ||
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