INT’L FERRO-ALLOYS CONF: Key talking points as the industry heads to Lisbon

While the ferro-alloys community prepares to gather in Lisbon, Portugal, Metal Bulletin looks at some of the key topics likely to dominate discussions at this year’s International Ferro-alloys Conference.

What shape will the European vanadium market take in 2018?
Chinese ferro-vanadium and vanadium pentoxide have been priced out of the European market for much of the year, with stronger prices available in the domestic market. Given changes to rebar legislation and a ban on China’s imports of vanadium in the cards, Chinese demand looks set to remain firm, making exports to Europe unappealing next year. Chinese producers have reportedly opened long-term negotiations with a request for marginal to no discounts against third-party price references, reflecting a lack of enthusiasm to do export business. If that is the case, smaller parties could struggle to compete in Europe, prompting the market to consolidate in the hands of larger parties.

Will ferro-chrome contracts shift away from the European Benchmark?
The 2017 chrome market was defined by sharp movements in the quarterly European Benchmark price, at times causing strife in the stainless market. Stainless steel producers’ margins experienced volatility amidst the precipitous rises and falls seen with each passing quarter. In light of the recently unpredictable nature of the European Benchmark seen over the past year, buyers in search of a more consistent base price may stray from the quarterly benchmark system. If they do, what formula contract alternatives are being considered?

How aggressive can ferro-titanium producers be in contract negotiations?
Optionality on long-term contracts has restricted ferro-titanium producers’ capacity to take part in the buoyant spot market this year. At the time of last year’s conference in Prague, sellers were producing no more than their contracted volumes while prices languished at seven-year lows. Fast-forward 12 months and spot prices are up 77% following a recovery in steel demand and scrap prices, but long-term commitments have frequently left producers unable to respond to abundant spot interest.

Can European traders get back into ferro-tungsten?
Traders have reduced their position in the European ferro-tungsten market in recent years, blaming the availability of cheaper tungsten concentrates from Russia for dragging prices down. Traders might take the opportunity for a more active role in the market since the Russian stockpile is believed to have been largely depleted, though the requirement to register with Reach could put paid to a more casual involvement.

Where is ferro-silicon heading in 2018?
Global ferro-silicon prices have experienced a boon the second half of 2017, as environmental scrutiny in China and supply concerns resulted in panic and speculation. While prices have dissipated from their peaks, the market is now on the rise once again amid resurfacing environmental issues and concerns over raw material availability in the Far East. Quartzite supply problems have arisen, as well, renewing the buzz that had previously set the ferro-silicon market ablaze. Are these issues here to stay, or will the buzz prove to be short-lived? What will the market look like in the first quarter 2018?