GLOBAL FERRO-SILICON WRAP: China FeSi market ticks up while Europe edges lower

Chinese ferro-silicon prices edged higher because of slightly tighter supply but European prices turned lower, reflecting reduced interest ahead of the traditional summer slowdown.

  • Chinese market picks up after expected price falls did not emerge
  • European prices slip in thin trading conditions
  • European steelmakers set to carry out maintenance in Q3
  • No US section due to holidays

Chinese spot price narrows
The Chinese ferro-silicon spot price ticked slightly higher this week, with the trading range also narrowing from last week’s assessment.

Metal Bulletin’s ferro-silicon price in the Chinese spot market was 5,500-5,600 yuan ($800-815) per tonne in-warehouse on Friday May 26, up almost 1% on the previous week, while the export fob price was flat at $1,130-1,150 per tonne.

“The low operational ratio at refineries makes supply a little bit tight,” a major Chinese producer said. “Consumers who hadn’t purchased enough material in the expectation that the price would fall are now buying again, and the market has seen pretty good demand this week.”

In the Chinese export market, most sellers are holding their offer prices in the belief that buyers will resist any such moves for now.

“Although domestic prices have climbed, I think it will take time for the [domestic] rally to be transferred to the export market,” a trader from eastern China said.

EU spot market slips
The European ferro-silicon market has edged down in the past week amid illiquid trading, with suppliers cutting their offer prices to encourage buying interest.

But, while there have been no reported firm deals, market participants reckon there may be more consumer activity in the near term.

Metal Bulletin’s price quotation for ferro-silicon delivered in Europe dropped to €1,250-1,320 ($1,365-1,442) per tonne on Friday from €1,270-1,300 per tonne previously.

“We haven’t seen any business this week,” one supplier said. “What we are seeing is a little bit softer, and the weakness is probably because of the coming typically slower quarter from July. But we expect a bounce after the seasonal slowdown as demand usually returns then.”

Traders said there were a few enquiries for low tonnages, of 5-10 tonnes and upward, at the top end of the market and perhaps a litttle higher, but nothing firm was reported.

One consumer said his company is set to return to the spot market for ferro-alloys in the next week or two, although consumers have sufficient stocks to last in the near term.

“We will shut one of our plants around the end of June, and another plant in August, both for three weeks as part of our maintenance schedule,” the consumer source said.

European steelmakers have signalled they are cutting production by 5-10% in a few weeks as part of third-quarter smelting schedules, according to another consumer. That will result in overall production rates of about 80-85%, he said

European ferro-silicon producer Ferroglobe has increased ferro-silicon production and more exports to Europe are expected from Malaysia this year. However, general spot availability is low, which has been a supportive factor in European prices this year, according to market participants.

Please note: due to holidays in the USA, there is no dedicated US section this week.

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