GLOBAL FERRO-SILICON WRAP: EU prices retreat approaching summer; Chinese market bolstered by production cutbacks

European ferro-silicon prices were seen retreating last week amid summer slowdown concerns, while Chinese prices inched up as sentiment continues to be positive.

• European market slips again ahead of summer slowdown
• European prices threatened by imports from Malaysia
• Chinese production cutbacks yield higher domestic prices
• US market remains propped up by inventory limitations

European market slides again
The European ferro-silicon market has edged down again in the past week, dropping as heavy industries in the northern hemisphere near their seasonal slowdown summer months of July and August.

Most market dealers are looking to sell alloy ahead of the next two months when steelmakers traditionally cut or shut production to do repairs and maintenance at their plants.

Ferro-silicon producers, however, appear to be planning to run at full production through the third quarter and there has been a steady rate of imports from Malaysia.

Stainless steel producers have also been cautioned on a steady run lower in chrome ore and ferro-chrome prices in the current quarter, as well as fall in world nickel prices.

Cash nickel prices on the London Metal Exchange have fallen to around $8,800 per tonne at present, from around $10,400 per tonne at the start of April.

Metal Bulletin’s price quotation for ferro-silicon delivered in Europe dropped to €1,220-1,270 ($1,364-1,420) per tonne on Friday June 16, down €10 from €1,230-1,280 per tonne previously.

One major consumer reported a deal for 300 tonnes of standard grade ferro-silicon at €1,250 per tonne delivered in June. However, the same consumer has been offered ferro-silicon for below €1,200 per tonne delivered in August, a traditionally slow month for business activity in Europe.

One supplier appears to be bucking the trend, holding steadfast with offers on either side of €1,300 per tonne delivered in the near term, but the overall market sentiment is bearish heading into what is typically a low point in terms of demand in the calendar year.

Other suppliers were commonly looking to offer ferro-silicon at around €1,240-1,260 per tonne delivered in coming days.

Chinese prices edge up on thin stocks
The Chinese ferro-silicon spot market moved slightly up this week after smelters raised offers on tight supply combined with robust demand.

Metal Bulletin’s ferro-silicon price in China’s spot market was at 5,550-5,650 yuan ($815-829) per tonne on Friday, up 50 yuan from a week ago. The fob price was stable at $1,120-1,150 per tonne on the day.

“Ferro-silicon demand from mills is not bad, while simultaneously supply remains tight as overall production is not large because previous low prices pushed some smelters to reduce production and others shut down due to environmental checks in the major production base of Inner Mongolia,” one producer in China said.

US market holds amid third quarter RFQs
The US ferro-silicon market held up once again last week amid continuing third-quarter and second-half negotiations.

Spot prices for ferro-silicon held steadily at 81-85 cents per lb on June 15, unchanged for the third consecutive week, according to Metal Bulletin sister publication AMM’s latest assessment.

Although not as active as the previous week, market participants continued to engage in third-quarter and second-half negotiations.

Through these negotiations, prices have solidified above 80 cents per lb, sources said.

“There are still some people out that we are waiting for feedback on, but one thing is for sure thus far, you have to be selling at the least at 81 [cents per lb],” a supplier source told AMM. “You can’t afford not to at this point.”

Current stocks of ferro-silicon have remained thin, forcing many to restock at higher prices.

“You are seeing more and more that there isn’t really much cheap material around anymore, and replacement costs put you at least at 80 cents,” a second supplier source said.