FeSi sellers capitalise on Asian product scarcity
2024-01-16
Since the end of last week, the European ferrosilicon (FeSi) market has been influenced by news from Asia. The ongoing tensions in the Red Sea are provoking shipment delays and rising freight rates on routes to Europe. FeSi sellers in Europe are capitalising on these factors despite still weak buyer demand.
The main news in recent days has been that at least two producers in Malaysia (Pertama Ferroalloys and OM Sarawak) have temporarily withdrawn offers to European buyers until the sea freight situation stabilises.
Metis got confirmation of this from European representatives of both mills. “At least in the short term, Malaysian material will be in short supply in Europe,” an insider commented. A sales agent for the Malaysian producer reports that “warehouses in Europe are almost empty and mostly booked for quarterly contracts, so any additional demand for ferrosilicon will go unanswered”.
According to Metis, this is already being used by local sellers: the producer, who offered FeSi at €1,400/tonne ex-warehouse last week, has raised the price tag to €1,450-1,460/tonne ex-warehouse. On Monday morning, a batch of 50 tonnes was contracted between two traders at €1,475/tonne FCA Rotterdam.
Kazakh-origin products are being offered at €1,550- 1,580/tonne DDP, with the seller being ready to concede up to €1,520/tonne DDP in negotiations with the end buyer. “For now, prices above €1,500/tonne are rather wishful thinking, but I would not be surprised if within 2-3 weeks it becomes the working level in Europe,” the source commented.
Overall, Metis estimates the current working level of FeSi (75% Si, 1.5% Al) spot prices in Europe to be in the range of €1,400-1,475/tonne DDP (+€25/tonne to the top end of last week’s range).
FeMo prices search for floor in Europe
2024-01-17
On January 17, discussions surfaced in the European market regarding ferromolybdenum (FeMo) sales dropping below $46/kg Mo DDP, although Metis has yet to confirm this information. “The market knows its gamblers. At once, you “sell” them below $46/kg Mo, then the price jumps to $50/kg Mo,” an international trader commented, without denying the possibility of sales at the abovementioned level. There are concerns regarding upcoming shipments of Korean material at $43-44/kg Mo costs, posing potential pressure on European prices. Some traders anticipate prices reaching $44-45/kg Mo DDP in the coming days, adding uncertainty to the market.
Meanwhile, in a recent inter-trade, 10 tonnes of FeMo changed hands at $46/kg Mo FCA, while a European steel mill has reportedly purchased 15 tonnes of FeMo at $46.75/kg Mo DDP.
The supply scenario from Armenia remains a topic of debate. While some traders express hesitancy in dealing with this material due to potential consequences related to sanctions, others foresee no immediate changes in volumes. “FeMo shipments might be replaced with MoOx, which is gaining popularity. However, Armenian material will continue to enter the European market,” an international trader commented.
Given recent developments, Metis has adjusted its estimates for FeMo (65% Mo min) prices to $46-$46.75/kg Mo DDP, a shift from the previous range of $46.5-48/kg Mo DDP observed at the end of the last week.
Concurrently, the sale of molybdenum oxide in briquettes (MoOx) in Busan has been reported at $19.55/lb Mo, while the business for MoOx powder has been concluded at $19.3-19.4/lb Mo. There have been indications of sales at $19.75-20/lb Mo DDP in Europe. However, considering the evolving market dynamics, these levels may still need to be deemed viable.
Indonesian nickel output falls short of targets in 2023
2024-01-19
In 2023, according to data disclosed by the mining ministry, Indonesia produced 535,200 tonnes of ferronickel and 71,400 tonnes of nickel matte. Despite a 3.6% YoY increase in annual ferronickel output, it fell below the targeted 628,600 tonnes. Similarly, the nickel matte output experienced a 6% YoY decrease, failing to meet the government’s target of 75,000 tonnes.
The decline in Indonesian nickel production is primarily attributed to a severe accident that resulted in the loss of 20 lives and injuries to over 100 workers, causing significant disruptions to production processes.