GLOBAL FERRO-SILICON WRAP: Chinese prices stabilize, European range widens

Chinese ferro-silicon prices have been steady in the past week, consolidating increases from a run higher through November. The European market has risen, with the top end of the trading price range moving up on new trades and more buoyant sentiment.

  • Chinese market cements gains amid signs of renewed strength
  • European trades push up price range
  • US market eases

The Chinese ferro-silicon market has been steady in the past week, with signs that prices may push higher again in the near term.

Metal Bulletin assessed Chinese domestic spot prices for ferro-silicon basis 75% silicon at 7,200-7,600 yuan ($1,088-1,149) per tonne on Friday December 1.

After a steady week of trading, prices rose around the end of the past week amid news that some ferro-alloys operations in parts of Ningxia Province, China, have been ordered to shut operations this winter to tackle air pollution.

“Ferro-silicon supply will face a deficit after the production suspension in Ningxia Province, although we might see a delayed response in spot prices,” a producer source said.

A trader source added: “Ferro-silicon basis 75% silicon [supply] is tight in the spot market, with major producers stopping offers to the market.”

An increase in December tender purchase prices from steelmakers has also indicated a potential upturn in ferro-silicon prices in the near term. Hebei Iron & Steel set its December tender purchase price at 7,500 yuan per tonne delivered, up 500 yuan per tonne from November. Shagang Group has also increased its December tender purchase price by 500 yuan to 7,400 yuan per tonne, sources said.

The Chinese ferro-silicon export fob price was assessed at $1,450-1,500 per tonne last Friday, unchanged from the week before.

European market stable, increases expected
European ferro-silicon prices increased in the past week, with the trading range up €50 per tonne at the top end. Market sentiment suggests there may be more increases through December as availability is relatively tight and suppliers should be keen to secure stronger prices ahead of quarterly settlements.

The spot market trading price range at this time is typically influential for suppliers and consumers settling longer term delivery contracts. First-quarter 2018 delivery settlements are due to be finalized in week 51 or 52. Suppliers suggest quarterly settlements from next January might be agreed at around €1,370-1,380 ($1,629-1,641) per tonne.

Europe typically consumes around 600,000 tpy of ferro-silicon, relying on 400,000 tonnes of domestic production and 200,000 tonnes of imports.

Metal Bulletin assessed European ferro-silicon, lumpy basis 75% Si, prices at €1,300-1,400 per tonne on Friday. The bottom end of the current trading range has not moved since October 6. One supplier reported selling more than 400 tonnes of standard grade ferro-silicon at €1,390 per tonne.

European spot ferro-silicon prices peaked this year at €1,410-1,525 per tonne on September 22, after an annual low of €1,120-1,200 per tonne in March. The market averaged around €1,150-1,200 per tonne in the first quarter of this year after moving up from €1,100-1,130 per tonne in late December 2016.

US market eases
The United States’ ferro-silicon market softened last week amid limited spot market demand. Spot prices for ferro-silicon slipped to $0.92-0.95 per lb on November 30, off one cent on the low end from the week before, according to American Metal Market’s latest assessment.

Spot trading activity has been low key, while consumers have been buying alloy. Still, international markets are fairly buoyant, prompting US dealers to expect them to influence domestic pricing in coming weeks.

“Replacement costs continue to go up, so [US] prices should be on a stronger footing as we get into the first quarter [2018],” a supplier source said.

Until then, US dealers expect domestic spot trading activity to be muted as business is focused on settling long-term delivery settlements.

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