GLOBAL FERRO-SILICON WRAP: Prices rise in USA, Europe on tight supply; China pauses [CORRECTED]

Ferro-silicon prices strengthened in the USA last week as traders sought to cover deliveries disrupted by shipment delays.

  • US prices rise as shipment delays disrupt deliveries
  • European prices rise as suppliers resist lowest offers
  • Trade flows to USA and Europe slow
  • Chinese domestic prices hold
  • Chinese export prices rise as smuggling wanes

US spot prices for ferro-silicon, in-warehouse Pittsburgh, edged up to 79-82 cents per lb on Thursday May 11, from 77-80 cents per lb previously, according to Metal Bulletin sister publication AMM’s latest assessment.

Market participants in the USA noted an increase in spot market interest last week after material was displaced in the Midwest due to barge disruptions and suppliers hiked offers to reflect higher costs for replacement material.

“We did some spot quantities of ferro-silicon to the trade in Chicago as high waters were making it difficult to get tonnage into the warehouse,” a supplier source told AMM.

Price strength in other global regions recently has limited the sourcing supply base, leaving the US market shorter on material, a second market source told AMM.

“China is not supplying much and smuggling in Vietnam and elsewhere is being cracked down on. There is Malaysian material on the water, but it is not huge because suppliers can’t get enough traders here to book forward material at a fixed price,” a second supplier source said.

Mills have taken in more material than was expected by this point in the year, sources said.

“Warehouses are telling me that there is not a lot of material flowing in relative to what is going out,” a third supplier source said.

Heading into second-half and third-quarter negotiations, market participants said they were bullish about the price outlook.

“There are some major steel mills that should be coming into the market over the next week or two for thousands of tons, which should be a real test for the market,” a fourth supplier source told AMM.

In Europe, spot ferro-silicon prices were also rebounding as suppliers resisted lower recent bid prices from consumers. 

Metal Bulletin’s price quotation for ferro-silicon delivered in Europe rose to €1,280-1,350 ($1,399-1,476) per tonne on Friday, up from €1,220-1,350 per tonne previously. 

Deals concluded directly between producers and consumers have been coming in around the low end, sources said.

“We’re being offered ferro-silicon at €1,300 per tonne on a spot basis, but we think that level should drop in the next few weeks as summer trading is usually slower,” one consumer told Metal Bulletin.

Still, suppliers said they expect limited imports to keep supply tight in the coming weeks, supporting prices through the rest of the quarter.

Traditional supplies from Brazil has been reduced since major producer Ferbasa has cut production to sell power back to the national grid.

There are negligible levels of ferro-silicon imports coming in from from Venezuela, and virtually nothing from Russia and China, from where sales to the EU are subject to anti-dumping duties.

Chinese prices stable
Only the Chinese domestic spot market remained stable last week, as a recent crackdown on smuggling led to anticipation of increased demand and higher prices for legitimate material. 

Metal Bulletin’s domestic Chinese ferro-silicon price held at 5,400-5,600 yuan ($782-811) per tonne, in-warehouse China on Friday.

Meanwhile, the country’s dollar-denominated spot prices edged up as exporters raised offers, sources said. 

Metal Bulletin’s price quotation for ferro-silicon, fob China edged up to $1,130-1,150 per tonne on May 12, compared with $1,110-1,160 of a week ago.

Trading activity remained limited as the price gap between overseas buyers’ bid and traders’ offers was as wide as $100 per tonne.

“So far, the bids from foreign buyers I received are only slightly above $1,000 [per tonne fob China] and that gap is too big to trade,” a Chinese trader told Metal Bulletin.

It could take time for overseas buyers to accept the higher offer prices out of China, one exporter predicted.

“I think it will take time for buyers to accept the Chinese prices,” the exporter told Metal Bulletin.
 

This article was updated on Wednesday May 17 with a correction to the price table for the Silicon grade 553, min 98.5% Si in-warehouse Rotterdam assessment. An earlier version had shown the previous week’s price range as €1800-1880. This should have been €1800-1900.