GLOBAL FERRO-SILICON WRAP: Chinese prices continue steep descent as demand fails to meet supply; EU, US prices hold
Chinese ferro-silicon prices continued to tumble last week, while European and US prices held in place.
• Chinese smelters increased production after prices rose in March
• Domestic Chinese demand remains weak
• US spot activity has remained low following the public holiday
Chinese prices continue downward slide
China’s ferro-silicon price moved further down last week amid increasing supply as well sales pressure in the spot market.
Metal Bulletin assessed Chinese spot ferro-silicon prices at 5,300-5,500 yuan ($774-803) per tonne on Friday April 21, down 300 yuan from a week ago.
“Production from smelters has increased recently as smelters lifted operating rates after seeing prices had gained in March,” a source from major producer in China said, adding that the average operating rate was about 65% in the major production bases.
It was up from about 45% in March, according to the smelter source.
“Mills will start their purchases for May soon. I estimate they may cut [bid] prices this time,” the source added.
Given weakened domestic demand, traders and exporters have also decreased their fob offers to reflect the price fall in the local market as well as to entice buying interest.
Metal Bulletin’s ferro-silicon fob China price also moved down to $1,090-1,160 per tonne on Friday, down from the previous pricing session’s level of $1,140-1,220 per tonne. Market participants reported limited deals concluded at the low-end of the price.
“We have to cut offers due to the fast price fall in the domestic market; I feel the market is still full of uncertainties and prices may continue to fall in the near term,” a major exporter told Metal Bulletin.
US, EU prices remain flat
Plagued by inactivity, the US ferro-silicon market remained flat last week.
Spot prices for ferro-silicon in-warehouse Pittsburgh held unchanged at 75-79 cents per lb on April 20, according to Metal Bulletin sister publication AMM’s latest assessment.
Despite the return of the market from the Easter holidays last week, spot activity remained in a lull.
“There hasn’t really been any enquiries coming in from end-users this week,” a supplier told AMM. “Consumers are all covered at this point.”
Despite the declining Chinese prices, market participants indicated that replacement costs have largely remained elevated, keeping import options limited.
“Actual availability is very tight on the ground besides the producers, who are raising numbers in line with Europe,” a second supplier source said to AMM.
Market participants indicated that offers from traders and suppliers with material available within the USA have begun to elevate offers, but transactions have not been plentiful.
“There’s been a lot of discussion on why numbers should be higher, but no opportunities to push back prices with limited demand,” a third supplier source said.
European ferro-silicon prices similarly flat-lined at €1,220-1,350 ($1,324-1,465) per tonne on April 21, according to Metal Bulletin’s latest assessment.