GLOBAL FERRO-SILICON WRAP: China up as European, US markets stabilise

The Chinese ferro-silicon market has climbed amid a shortage of supplies and increased raw materials costs, while the USA and Europe are holding despite little spot buying interest amid the seasonal slowdown.

  • China producers push up offer prices 
  • ….with supply shortage, raw material costs supportive 
  • US market finds support 
  • …as does Europe despite low-key activity

China producers push up prices

China’s ferro-silicon spot price increased last week, extending gains from the previous week on a producer push in the market. Metal Bulletin’s Chinese ferro-silicon price was at 6,000-6,300 yuan ($887-931) per tonne on Friday July 21, up 100-200 yuan ($15-30).

“The price edged up because of supply deficits, stricter environmental policies and rising raw materials costs,” one major producer in China said, adding that the costs of power and semi-coke have also jumped.

“Supply is tight as smelters are holding their production levels low because of environmental checks, and the current bullish rebar market is also supporting the ferro-silicon market,” a trader said in Beijing.

Given increased domestic Chinese prices, the export fob price has also increased – to $1,250-1,290 per tonne, from $1,180-1,220 per tonne in the week before. 

“China’s ferro-silicon price moved up very fast – so far the lowest offer I have received this week is $1,250 fob China,” a Seoul-based trader said.

“We have to lift the offer price as there are only very limited cargoes that can be supplied for export amid firm domestic demand,” one Chinese exporter said.

US market stable

The US ferro-silicon market was stable last week despite spot market activity slowing to a virtual halt. Spot prices for ferro-silicon were 80-82 cents per lb on July 21, according to Metal Bulletin sister publication AMM’s latest assessment.

The spot market is in the middle of a traditional summer lull, with very little trade being offered to consumers, with prices levelling out after a rebound of three cents on the low end the week before.

“There haven’t been any major enquiries for ferro-silicon this week,” a supplier source said.

“We sold some trucks of ferro-silicon to traders, but there is no end-user demand,” a second supplier source told AMM.

Although consumer demand has fallen, traders have looked to supplement thinning inventories in recent weeks. Aside from that, steady demand levels on long-term contracts has held overall supplies at a tight level. Market sentiment suggests tight supply levels may prompt higher offer prices in the near term.

Europe holds price floor level
The European ferro-silicon market has been unchanged, with prices holding a floor at a psychological level of €1,200 ($1,387) per tonne despite a virtual lack of demand in the seasonal slowdown.

Market sentiment had suggested the floor price may be vulnerable to lower offer prices below €1,200/tonne, with some expectation that suppliers may cut their offer prices to encourage buying interest. Moreover, increased exports to Europe from Malaysia, where OM Holdings has been increasing ferro-silicon production this year, had also been expected to drag on European market prices in the third quarter.

However, it seems that exporter offers levels have diminished to Europe so far this month, which has offered some support to European market prices.

Metal Bulletin’s price quotation for ferro-silicon delivered in Europe held at €1,200-1,250 ($1,387-1,445) per tonne on Friday July 21. The latest import data in the European Union from traditional exporter supplier Brazil shows that the stream of supply is well down so far this year. Ferro-silicon shipments from the South American country jumped to 3,777 tonnes in June, although those exports fell almost 48% in the first six months of 2017 year-on-year at 40,282 tonnes.