COMMENT: Hot topics for MB's 28th International Ferro-alloys Conference in Berlin

Over 1,200 participants in ferro-alloys markets assembled at the Intercontinental Hotel in Berlin on Sunday November 11 to do business, renew contracts and acquaintances and discuss the past year and the year ahead.

By
Over 1,200 participants in ferro-alloys markets assembled at the Intercontinental Hotel in Berlin on November 11 to do business, renew contracts and acquaintances and discuss the past year and the year ahead.

Prices in bulk alloy and noble alloy markets will be high on the agenda.

But other subjects will be up for discussion too.

Pricing mechanisms
The quarterly ferro-chrome benchmark and the monthly alloy surcharge are becoming increasingly discredited. There are calls for both to be removed and replaced with more efficient systems but serious alternatives are yet to be proposed.

Production cuts
Market participants fear production cuts so far this year have not been enough to bring markets into balance. Widespread power-saving shutdowns in South Africa prompted temporary supply concerns but prices later fell to three-year lows. High electricity prices in countries including Ukraine and Norway have also prompted cutbacks.

South Africa: power, consolidation, ore exports
South African electricity prices continue to soar and there are no signs that the country will have an affordable, sustainable power supply in the foreseeable future. Most major producers are linked to takeover rumours even as large players are reported to be looking for an exit. Despite the government’s push for beneficiation and job creation, cheap chrome ore exports continue to flow to China, supporting the rival ferro-chrome industry there at the expense of South Africa’s.

Stainless steel outlook
The stainless steel industry is expecting another tough year, spelling protracted poor demand for ferro-alloys and continued reluctance to build stocks. Spot volumes will remain under pressure and frame contracts will continue to disappoint.

BHP’s manganese assets
Investment bankers have approached manganese market participants over a potential sale of BHP’s manganese assets. They were not appointed by BHP, which would not comment on the situation, but the miner has indicated that non-core assets may be offloaded. Many market participants believe a deal could be imminent but are split as to which assets would go.

DCM Decometal’s ferro-titanium and ferro-chrome assets
DCM Decometal is selling its ZMZ ferro-titanium plant in Russia and is looking at options for its Albanian Chrome operation. The company told Metal Bulletin in September it had received interest from potential joint venture partners.

Mechel’s nickel and ferro-chrome assets
Russian steel group Mechel plans to divest the Southern Urals nickel plant and the Tikhvin ferro-alloy plant in Russia and the Voskhod-Chrome and Voskhod-Oriel assets in Kazakhstan as it seeks to offload non-core assets.

Privat’s production levels
Ukrainian ferro-alloys producer Privat is notoriously tight-lipped about its operations and understanding the company’s plans for its three plants is crucial to correctly predicting manganese alloys supply and demand. The company cancelled the closure of its Zaporozhye plant after provisionally securing a more favourable power tariff. It may instead ramp up production by 60%, according to the Ukrainian press.

Alex Harrison
aharrison@metalbulletin.com
Twitter: @alexharrison_mb 

Recent Base Metals News

Editor's pick