GLOBAL FERRO-SILICON WRAP: US, Chinese FeSi markets hold firm, while EU market slides
The Chinese and US ferro-silicon markets held steady last week amid tightened supply, while European prices retreated on increased availability.
- Chinese market stable, sentiment improving
- Thin inventories support US prices through quarterly negotiations
- European prices slide amid increased stocks
Chinese market remains stable
The Chinese ferro-silicon market remained stable this week, while sentiment improved and market participants indicated that prices may move up in the near term owing to tight supply.
Metal Bulletin’s assessment of the Chinese spot ferro-silicon price remained unchanged from the previous week at 5,500-5,600 yuan ($809-824) per tonne on June 9, while the fob price stood at $1,120-1,150 per tonne on the same day, also flat with a week earlier.
“I think prices will go up in the coming weeks due to the current supply tightness in Inner Mongolia as some small furnaces have been shut down following environmental checks, while production in the Qinghai region has also fallen amid limited availability of the raw material silica,” a Chinese producer source told Metal Bulletin.
Meanwhile, demand from domestic steel mills has held steady recently, further supporting ferro-silicon prices, the source added.
Tight US market holds firm
The US ferro-silicon market remained firm through the first wave of third quarter and second half negotiations, as limitations in material availability continued.
Spot prices for ferro-silicon in the USA maintained course at 81-85 cents per lb on June 8, according to Metal Bulletin sister publication AMM’s latest assessment.
Activity in the US spot market saw a significant increase last week as several mills concluded their second half and third quarter negotiations.
“We booked quite a bit of business for the second half, and at much better prices than anticipated,” a supplier source told AMM.
“Everything over 100 tonnes started with an “8”, with at least one solid digit behind it,” he added.
After a lengthy period of lagging behind the global markets, market participants indicated that US prices have finally caught up.
“You can’t get replacement material for anything less than 80 cents, so the only way you would be selling below that mark at this point is if you had material you really wanted to cash out,” a second supplier source told AMM.
The previously lagging prices allowed the market supply to tighten up, which is now providing support for pricing amid the typically aggressive quarterly negotiations.
“The market came to a head. No one who was saying that there wasn’t much inventory in the [USA] was wrong. That is why we are seeing these prices having staying power,” a third supplier source told AMM.
European markets slip on ample stocks
Metal Bulletin’s price quotation for ferro-silicon delivered in Europe fell to €1,230-1,280 ($1,378-1,434) per tonne, delivered in Europe on June 9, down €40 per tonne on the high end of the range.
Sales were reported between €1,260 and €1,275 per tonne, delivered, as good availability of Malaysian and Egyptian ferro-silicon put pressure on producers to cut their offers.
However, the pressure may be short-lived as western producers are well booked on long-term contracts and only have a limited amount of material to sell to spot enquiries.