GLOBAL FERRO-SILICON WRAP: US climbs on tight supplies as Europe slips again

US ferro-silicon prices increased again last week after a brief pause in the previous week, reflecting persistently tight supply that encouraged higher offer prices, while European spot deals have been settled lower ahead of the traditionally slower summer months.

• US availability tightness persists
• …pushing up domestic offers versus replacement costs
• European suppliers cut offer prices
• …amid steady rate of Malaysian imports 

Spot prices for ferro-silicon in the USA climbed to 81-85 cents per lb on June 1, up 2.5% from 80-82 cents per lb previously, according to Metal Bulletin sister publication AMM’s latest assessment.

Prices have climbed 7.8% since the price run started six weeks ago, up from 75-79 cents per lb on April 20. US ferro-silicon inventories have been depleted as replacement costs from overseas have been prohibitively priced for traders who have been looking to restock material in recent months.

“Ferro-silicon stock levels are still tightening and that is showing up in pricing now that traders and suppliers have to factor in replacement costs,” a supplier source in the USA told AMM.

The trend in US spot ferro-silicon prices, which had been lagging behind the higher trend in other international markets this year, is catching up because of a restocking phase.

“It makes sense that prices are moving above 80 [cents per lb], because I don’t know where you are going to replace below that cost,” a second supplier source said.

Earlier, market worries about relatively new US import levels from Kazakhstan and Malaysia have been allayed because US importers are showing restraint to avoid any potential anti-dumping investigations.

US demand has started to pick up for demand for third- and fourth-quarter delivery, with at least one major steel mill looking for several thousand tonnes of ferro-silicon this week for shipment in the second half of the year. US market sentiment suggests that current price strength should last in coming weeks against import replacement costs.

European market weakens
The European ferro-silicon market has shown some weakness in the past week, dropping at the lower end of its trading range as suppliers cut their offer prices to encourage more business. A steady rate of ferro-silicon imports from Malaysia, where producer OM Holding has been increasing production and sales this year, has also been reported in Europe. 

Metal Bulletin’s price quotation for ferro-silicon delivered in Europe dropped to €1,230-1,320 ($1,381-1,482) per tonne on Friday June 2 from €1,250-1,320 per tonne previously.

“The market is looking slow coming into the seasonal slowdown [of July and August],” a major supplier said. “Steelmakers are telling us they will be having seasonal maintenance shutdowns in July and August, which should mean lower prices averaging around €1,250.”

Deals for prompt delivery for several hundred tonnes of ferro-silicon in 100-200-tonne lots were reported to have been settled between €1,230 and €1,260 per tonne. But relatively low availability around European consumer stockyards should offer some support to market prices in the near term, industry sources said.

China market steady
The Chinese ferro-silicon spot market has been stable in the past week. Metal Bulletin’s ferro-silicon price in China’s spot market was 5,500-5,600 yuan per tonne on Friday, while the fob price narrowed to $1,120-1,150 per tonne from $1,130-1,150 per tonne amid low key trading.

“The overall sales performance in ferro-silicon trading is just so-so, but then overall supply is not big,” one major producer in China said.

Some smelters in major production bases have decided to produce other alloys instead of less profitable ferro-silicon sales, resulting in lower availability and stronger support for the spot market, the source added.

See also:
GLOBAL SILICON WRAP: European silicon prices unchanged amid low activity; Chinese prices firm ahead of capacity restarts 

The price quotation for ferro-silicon delivered in Europe for the week ending May 26 has been amended in this report to €1,250-1,320 per tonne. The price appeared correctly in table, however.