August ferroalloys price insight

In August, despite the usual decline in buyer activity during summer, the prices of almost all ferroalloys in Europe increased. For some products, the price increase exceeded 40% compared to July 2021.

Market Insights

Global factors influencing the growth of ferroalloys quotations were product shortages and continued unprecedented growth of ocean freight costs.

Taking into account further recovery of business activity in September-October, the remaining deficit of certain ferroalloys on the global market and risk of new production and/or logistics constraints in case of new COVID-19 outbreaks may mean that the upward price trend on ferroalloy markets will continue.

Meanwhile, Metalshub continues to expand the price coverage of ferroalloy markets. To this end, two new price indices for molybdenum products were introduced in August. A molybdenum oxide powder price index is available for 57% Mo min, C 0.10% max, S 0.10% max, Cu 0.50% max, Pb 0.05% max specification. Normalised for delivery FCA to a major European seaport and pre-payment basis. The second index is a molybdenum oxide briquettes premium index with the same specification. The index will reflect the premium that is being paid in the market for Mo oxide briquettes compare to powder price. The indices will be updated monthly.

Manganese and Silicon

In the European ferrosilicon market (75% Si min, 1.5% Al max), prices in August grew rapidly. The price growth accelerated by the end of the month amid growing demand from European consumers and an acute shortage of available volumes. Malaysian plants, which cover up to 30% of regional consumption and more than half of imports, are still idle because of the acute phase of the COVID-19 outbreak in the country. Meanwhile, shipping Chinese or Indian products are getting more expensive by the day due to skyrocketing shipping costs. In addition, suppliers are speculating on higher prices for Russian and Kazakh exports after the introduction of temporary export duty in the EAEU countries from August 1. Towards the end of the month, it became known about the planned shutdown for repairs of one of the European producers in autumn, which will also support the price growth. On the Metalshub trading platform, the offer prices for FeSi steadily rose during August to the level of €2,100/t DDP, though during negotiations some customers managed to bring down the price. However, the weighted average price index for the alloy rose by more than 5% during the month. At present ferrosilicon prices in Europe exceeded the previous record level, which was fixed more than 12 years ago.

In the segment of manganese products, manganese metal was the undisputed leader of price growth. With over 90% of manganese supply coming from China, the European market in August was heavily affected by two factors contributing to the record price growth: solidary reduction of output by Chinese plants amid environmental restrictions and seasonal repairs, as well as rising ocean freight costs. As a result, the weighted average price index for manganese metal flakes on Metalshub rose more than 45%, breaking records since the start of quoting on the platform.

In contrast, the situation on the markets of bulk manganese ferroalloys remained stable: the absence of noticeable fluctuations on the world market of manganese ore and the seasonally reduced demand conditioned the relative stability of quotations. As a result, the average weighted price index for HC FeMn (75% Mn min, 8.5% C max, 0.25% P max) on the Metalshub platform rose by only 1% in August, whereas the price index for SiMn (65% Mn min, 16% Si min) even slightly fell, though insignificantly.

Noble and Chromium alloys

In August, the upward price trend in the European molybdenum market, which had given way to a decline in July, resumed. In addition to rising costs and delays in shipments of Chinese products, prices were supported by strikes at several molybdenum mining companies in South America and Canada. The weighted average FeMo price index on the Metalshub trading platform rose by 8% for the month, a similar trend was observed in the molybdenum oxide segment, and the value of the premium for oxide briquettes, which reached speculative $1.90/lb Mo in June-July, returned to the traditional 70-80 cents/lb Mo.

Ferrochrome prices in Europe also grew in August. The rise in prices was especially noticeable in the low-carbon ferrochrome segment - the weighted average price index for the alloy on Metalshub rose by 32%, which was primarily due to the growth of export costs from Russia and Kazakhstan (key importers to the EU) after the introduction of temporary export duty in those countries. The same reason led to an increase in the cost of ferrotitanium, the weighted average price index for which on Metalshub platform rose by 11%. High-carbon ferrochrome on the European market rose by 20% last month, which was primarily due to the growth of the cost of delivery of foreign products, primarily from South Africa.

About the Metalshub Price Index.

The Metalshub price indices are 100% based on real transactions, bids and offers from the digital Metalshub platform, which is a fundamental shift in price reporting. The information is collected automatically without any journalistic work, e.g. telephone calls to market participants. This methodology minimises the risk of price manipulation and ensures a more robust picture of real market prices.

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Written by Alex Andreev

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