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July ferroalloys price insight

Steady growth in consumption and supply shortages support ferroalloy prices as the negative impact of pandemic-induced restrictions has eased and thus ,steel production in key regions continues to recover. In turn, this is supporting ferroalloy prices, although traditionally July is the 'dead' holiday season in the markets. 

Market Insights

According to Worldsteel, in the first half of the year, global steel production rose by more than 14% year-on-year, exceeding 1bn tonnes. China increased output by 11.8% to 563 million tonnes, EU countries by more than 18% to 77.8 million tonnes, India by 31% to 58 million tonnes, USA by 15% to 42 million tonnes and Germany by 18% to 20.6 million tonnes.  

In addition, almost all segments of both bulk and noble ferroalloys have a supply deficit. As a result, the US market for bulk alloys, which is largely dependent on imports, is experiencing rapid price increases, on which sellers in Europe are also speculating. Extremely low output of manganese and silicon alloys in Malaysia amid the coronavirus outbreak in the country, as well as rising shipping costs to EU and US ports, are driving up Asian and Chinese product prices in the global market. 

To broaden the price coverage of the ferroalloy markets and to improve service to its customers by providing the most useful, accurate and reliable data, Metalshub has introduced a new price index. Since July 2021 a ferrotitanium price index is available for the following specifications: 65% Ti min, 5% Al max lump >10 mm. Normalised for delivery FCA to a major European seaport and pre-payment basis. The index will be updated monthly.

Manganese and Silicon

In the European ferrosilicon market (75% Si min, 1.5% Al max), prices continued to rise in July. Appealing to a lack of Malaysian supply, rising ocean freight rates as well as unprecedented price increases on the alternative North American market, traders in the EU tried to push offer prices above €2,000/tonne, although they succeeded only in sporadic transactions and mostly for immediate small shipments. Nevertheless, Metalshub's FeSi weighted average price index rose again in July by 6%, once again reaching a new high since the platform's observation. 

In manganese alloys, the trend was similar, with offer and transaction prices on the Metalshub trading platform rising during July. Towards the end of the month, the situation in South Africa was the main leitmotif of the price increase. Amid street riots, the country's transport arteries were blocked and there was also a physical threat to people's safety. In this context, several manganese alloy producers in the country (Assmang, Transalloys) declared force majeure on supplies, while ore exporters raised selling prices for the global market (primarily for Chinese consumers, which are the largest supplier of manganese metal to the EU).  

As a result, the weighted average price index for HC FeMn (75% Mn min, 8.5% C max, 0.25% P max) on the Metalshub platform rose by 10% during July, while the price index for SiMn (65% Mn min, 16% Si min) rose by 2%. Meanwhile, the weighted average price index for manganese metal flakes on the Metalshub trading platform rose by 6% in June.

Noble and Chromium alloys

In July, one of the few ferroalloy markets to show a downward price trend was ferromolybdenum. After a rapid increase in price in May-June, the alloy quotations rolled back - the weighted average price index for FeMo on the Metalshub trading platform fell by 14%. However, in the last week of July, the trend has changed again: an alloy deficit in China amid rumours of another reduction in output by major producers and the rising cost of ocean freight have allowed European suppliers to increase their offer prices by 2-3%. 

The situation in South Africa has also triggered an increase in ferrovanadium prices, although the expected rush has not yet occurred. The Metalshub price index for FeV in Europe rose by 3%. Metalshub's weighted average ferrotitanium price index had a similar increase in July. Quotations strengthened, even despite moderate demand. 

Quotations for chrome alloys reached a local peak in July. By the end of the month, prices for high-carbon ferrochrome (65% Cr, 9% C max) on the EU market reached the highest in 18 months. Insiders cite a shortage, rising shipping costs and the unstable situation in South Africa among the reasons for the price increase. The country is the world's largest supplier of chrome ore as well as one of the leading exporters of ferrochrome. 

The ferrochrome price index on the Metalshub platform was up almost 5% for the month.

About the Metalshub Price Index.

The Metalshub price indices are solely 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.

Written by Alex Andreev

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