European Ferroalloys Price Insights -December 2022

In December, manganese and silicon alloys, as well as ferrochrome prices in the European market, were mostly down on the back of seasonal reduction of business activity. In contrast, the noble ferroalloys segment saw a price increase, triggered by speculative actions of trading companies and a similar trend in China.

Market Insights

Carbon steel production continues to decline in most regions. Global carbon steel output again declined in November reaching 139.1M tonnes, down 5.5% MoM and down 2.6% YoY, while total production over January-November 2022 declined 3.7% YoY.

In China, steel production totaled 74.5M tonnes, down 7% MoM and only up 7.3% YoY. In the rest of the world, only Indian steel output has grown in November (up 5.7% YoY), reaching 10.4M tonnes. The EU’s output fell by 17.9% YoY, to 10.5M tonnes. German steelmakers produced 2.8M tonnes, down 10% MoM and 17.9% YoY. In North America, carbon steel output declined by 6.3% YoY, in South America by 14.3%, and the CIS+Ukraine by 24.6%.

The Metalshub all metals index, however, shows an increase in the value of the basket of indices in December. Ferroalloys prices are not expected to fluctuate significantly in the coming weeks, while the macroeconomic situation in China, fluctuations in the EU energy market, and developments in the war in Ukraine will be key factors affecting metals markets.

Metalshub All Metals Index
Manganese and Silicon
  • Weak demand in the run-up to Christmas led to lower prices for ferroalloys in Europe.

  • Electricity prices in Europe started rising again at the start of winter.

  • Norwegian producer FeSi has shut down furnaces at one of its plants because selling its own generated electricity is more profitable than selling ferroalloys.

  • At the same time, spot gas prices in the region hit a local low by the end of the month.

  • Confusion over quarantine restrictions in China continues to complicate logistics, with the result that the cost of manganese metal in Europe is rising.

Noble and Chromium alloys
  • Traders speculating on higher molybdenum prices in China have also pushed up prices in Europe.

  • In addition, the situation in Peru is contributing to the rush on the market. Following the presidential election, the country is in turmoil, threatening the stability of the largest copper and molybdenum mines.

  • Tougher sanctions against Russia and the refusal of some EU consumers to buy Russian material lead to higher prices for ferrotitanium and ferrotungsten.

  • Despite steadily rising demand from the battery industry, most analysts agree that high price volatility will prevail in the nickel market in the near future, with an overall upward price trend.

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