European Ferroalloys Price Insights - January 2022

In the European ferroalloys market, 2022 started with clearly opposing price trends in the bulk and noble ferroalloys segments. Most bulk alloys (silicon and manganese groups) fell in price by 20% on average. The main reason for this was seasonally weaker demand following the signing of long-term contracts for Q1 in November and December. On the spot market, there were only a few requests for FeSi or HC FeMn during the month.

Market Insights

In the European ferroalloys market, 2022 started with clearly opposing price trends in the bulk and noble ferroalloys segments. 

Most bulk alloys (silicon and manganese groups) fell in price by 20% on average. The main reason for this was seasonally weaker demand following the signing of long-term contracts for Q1 in November and December. On the spot market, there were only a few requests for FeSi or HC FeMn during the month. 

Noble ferroalloys, on the other hand, were rapidly rising in price amid raw material shortages, costly logistics and, towards the end of January, the Chinese New Year holiday break and significant disruption to Chinese ports due to the Covid-19 outbreak. 

In the coming weeks, at least current price levels or even a slight increase in ferroalloys prices is expected in the market due to lower supply and high production costs. 

Manganese and Silicon
The weighted average FeSi price index at Metalshub fell by 20% in January, with the alloy price dropping below €3,000/tonne for the first time since October. Nevertheless, ferrosilicon in Europe is still almost three times more expensive than a year ago. In recent weeks on the market, there was information about production stoppages in Spain at the Ferroglobe plant, in Slovakia at OFZ furnaces, as well as in Iceland at the Elkem plant. In the first two cases, the reason was unaffordable energy prices, in the third - problems with energy generation. So it can be forecasted that in the short term, the price of the alloy in Europe will not fall. 

Separately, we note that political events in Kazakhstan (one of the largest suppliers of ferrosilicon to Europe) did not affect supply to the EU. Moreover, at least two new projects are underway in the country, which envisages the construction of FeSi plants by 2023-2025. 

Seasonally weak demand also harmed the silicomanganese market, with the weighted average Metalshub index dropping by 20% in January. The price of HC FeMn on the marketplace fell by 15%. Both manganese alloys are now quoted at last July's prices when the market was also experiencing seasonally low consumer demand. Given the situation at Chinese ports, we can expect the price of manganese ore to rise on the world market soon. In addition, in Europe, energy prices are not expected to fall, putting a burden on producers' shoulders. This, coupled with a recovery in demand in February and March, could provide support for ferroalloys.  

A price rise should also be expected in the manganese metal market. The weighted average index for manganese metal flakes on Metalshub rose 1% in January. As Chinese exporters will be inactive in the next two weeks due to the New Year holidays in the country, demand for products with quick delivery in Europe will meet higher price tags. Nor should we forget the limited capacity to make shipments from Chinese ports due to epidemiological restrictions. 

Noble and Chromium alloys

Prices of ferromolybdenum and molybdenum oxide on Metalshub rose 5% in January. Demand for molybdenum was generally subdued due to seasonal factors, but global market shortages of oxide and difficulties in shipping from South Korea supported prices. 

Difficulties with the shipment of material at Chinese ports had a significant impact on ferrovanadium and ferrotitanium prices in Europe in January. Thus, the weighted average price index for FeV on Metalshub increased by 13%, the index of FeTi - by 15%. At the same time, the volume of ferrovanadium sold through Metalshub reached a peak since September 2021. 

Low-carbon ferrochrome rose on Metalshub by an average of 2% weekly in January. The price increase was driven by a similar trend in China, where consumers were buying in advance of the New Year holidays and the Olympic Games, the preparation and staging of which, to varying degrees, force ferroalloys producers to cut output to meet environmental requirements. 

Metalshub's high-carbon ferrochrome price index was flat in January, but prices are expected to rise in the near term due to lower output in Turkey and the consolidation of supply following the completion of AlbChrome's takeover by Yildirim Holding.

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Written by Alex Andreev alexandr.andreev@metals-hub.com

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