European Mn alloys market sees ambitious price surge attempts
2024-01-12
This week, the European manganese alloy market experiences price increases in the absence of recovery in demand and trading activity after Christmas. Despite sluggish buyers’ interest, sellers are eager to capitalize on any opportunity to increase prices. However, these ambitious pricing plans are yet to result in actual deals, indicating a disparity between wishful thinking and market reality.
The Red Sea’s ongoing instability favors offer prices increase by exporters, predominantly those from Asia. Freight rates to Europe and delivery duration surge create significant risks when it comes to buying Indian and Malaysian material.
Specifically, Indian-made SiMn is available at $890- 940/tonne FOB, with unpredictably daily rising freight prices versus the previous $850-870/tonne FOB, while HC FeMn (75%) is available at $890/tonne FOB. Indian exporters continue to offer material exclusively on FOB terms, avoiding CIF, while Malaysian exporters, according to some information, have halted sales to Europe due to uncertainty in the European market.
Consequently, European traders are currently exploring alternative options and expressing interest in materials, particularly from Latin America, perceived as less risky ones, despite still being more expensive. Notably, Brazilian SiMn is available at $1,150/tonne CIF.
Meanwhile, consumers of manganese alloys do not demonstrate any demand and are in absolutely no hurry to sign new contracts. “We all see the surge in offer prices, but there are still almost no deals. Everyone is holding their breath and just waiting,” the insider commented. “Even if someone in Europe needs the material, they will take it from the local stocks, avoiding unnecessary risks,” a major European trader highlighted.
Overall, Metis estimates the current workable spot price for silicomanganese (65% Mn, 16% Si) in Europe within €960-1,050/tonne DDP (+€45/tonne from before), reportedly offers reaching €1,100/tonne DDP. HC FeMn (75%) price stands at €960-1,050/tonne DDP(+€75/tonne).
Global FeCr market braces for substantial supply reduction
2024-01-10
The global ferrochrome (FeCr) market is currently engaged in active discussions surrounding a substantial production reduction announced by one of the largest global producers. Despite the significant cutback, the market appears relatively calm, indicative of the prevailing unfavourable market conditions.
Specifically, for the year 2024, Yildirim Group, Turkiye’s leading chrome producer, is set to implement a notable 40% reduction in production across its ferrochrome plants compared to the levels achieved in 2023, having produced approximately 230,000 tonnes of FeCr last year. “As 2024 is expected to be a difficult year in stainless steel production and eventually in ferroalloy consumption, we have made this decision,” a representative of the company commented. The duration and extent of these production adjustments will depend on economic and market conditions. “The market will determine how long we will run at this capacity,” a source stated.
Consequently, the Russian smelter Tikhvin Ferroalloy is expected to operate a single furnace with minimal capacity, primarily focusing on the domestic market. Albanian Albchrome and Swedish Vargön Alloys AB are anticipated to operate at 40%, and the Turkish plant Eti Krom will run at 30% capacity. The market anticipates these adjustments without showing signs of panic at present.
In light of strategic adjustments, Yıldırım affirms its long-term commitment to ferrochrome customers, assuring that the reduction in production will yield no lasting consequences. The company underscores the adequacy of current stock levels, in conjunction with the judiciously scaled-down production, to meet the ongoing demand.
FeTi prices skyrocket in Europe driven by supply tightness and surging demand
2024-01-12
Post the New Year holidays, European steel mills have re-entered the market to replenish their inventories, setting a notable shift in ferrotitanium (FeTi) prices. Capitalizing on the prevailing scarcity and robust demand, FeTi producers have leveraged the situation to increase prices. Furthermore, this proactive approach stems from the challenging circumstances faced by European FeTi producers earlier. A European producer highlighted the infeasibility of previous margins, with feedstock prices at $3/kg Ti and sales slightly above $5/kg Ti DDP.
This week, FeTi (65% Ti min) prices in Europe witnessed a notable surge, reaching $6.2-6.25/kg Ti DDP. The increase has been evident in deals covering both shipments scheduled for February from producers and prompt shipments from traders. Following the recent successful transactions, FeTi suppliers are actively pushing prices higher in their new offerings, indicating an ongoing upward trend in the market.
In particular, Metis has learnt of a fresh offer for March-April shipment from the European mill at $6.5/kg Ti DDP, while the trader is aiming to get $6.45- 6.75/kg Ti DDP.
While the upward trajectory was anticipated, the pace of increase has surpassed expectations. A European FeTi producer remarked, “Someone apparently hit the panic, prompting others to adopt a similar stance.”
Apart from factors mentioned above, concerns were raised about the feasibility of trading of Russian-origin FeTi. According to a trader, “Suppliers of Russian goods face hurdles as many European banks are now hesitant to provide financing and process payments for ferroalloys of Russian origin. Unless you have an account with a Turkish, Indian, or Chinese bank, trading becomes a challenging prospect.” Meanwhile, some participants still express confidence that trading of ex-Russia FeTi may remain unaffected. They point to a critical clause in the sanctions package that permits the execution of contracts initiated before December 19, 2023, until December 20, 2024, thereby allowing a potential continuation of trading activities until the latter date.
Suppliers of raw materials have followed a similar approach, elevating their offers, and in some instances, withdrawing them, thereby fueling an additional surge in prices. Notably, recent offers for Ti turnings have climbed to $3.5/kg Ti, whereas the latest transactions have been completed within the range of $2.7-3/kg Ti DDP.
On balance, the current Metis prices for FeTi (65% Ti min) have climbed to $6.2-6.5/kg Ti DDP, marking a substantial increase from the prior levels of $5.5-5.8/kg Ti DDP recorded at the end of the previous year.