Ferroalloys prices in the European market continued to rise in May, with some segments showing notably higher growth dynamics than in April. Among the fundamental reasons for this was an unprecedented jump in prices for all types of steelmaking raw materials, above all iron ore, as well as high levels of steelmaking recovery in all key regions - China, the US and the EU.
By mid-May iron ore prices in the global market, driven by record GDP growth and steel production in China, had jumped 22%, surpassing the previous record reached in the final weeks before the collapse of steel markets in June 2008. In the second half of May, raw material prices went down, albeit at a more moderate-than-expected pace, as reflected in ferroalloy prices.
Ferroalloy prices in both global and European markets continue to be supported by the consuming industry. As global economies emerge from the severe lockdowns imposed as part of the fight against the global pandemic, the rate of steelmaking recovery is outpacing even the most optimistic forecasts. In April, steel output in Asia rose by 19% YoY, in the EU by 43% and in North America by 10%.
Manganese and Silicon
Appealing to delays in material shipments from Malaysia due to the Suez Canal blockade, as well as outpacing price increases in the US, ferrosilicon suppliers (75% Si min, 1.5% Al max) in Europe continued to increase offer prices in May. For the most part, the increase in quotations was taken up by end-users. The weighted average FeSi price index on the Metalshub trading platform rose by 4%, confidently breaching the €1,630/mt FCA. In the second half of the month, however, the price increase came to a halt.
Manganese alloy prices in Europe were also on the rise in May, supported by steady demand and some spot market shortages. As before, several producers (according to some traders) were holding back material, fuelling the rush. The weighted average price index for high-carbon ferromanganese (75% Mn min, 8.5% C max, 0.25% P max) on Metalshub rose 6% in May. The SiMn price index (65% Mn min, 16% Si min) jumped by 11%, primarily due to a similar trend in the US, which is an alternative market to Europe for some producers.
Strong demand in China and another round of freight rate increases led to a rise in European manganese metal prices. The weighted average price index for manganese metal flakes on Metalshub rose by 5.5% in May.
Molybdenum, Vanadium and Chrome
European ferromolybdenum prices moved steadily upwards in May, with the price increase accelerating sharply in the third week of the month. Following a similar trend in China, triggered by a rise in molybdenum oxide prices, FeMo quotations on the European market have soared. The weighted average ferromolybdenum price index on the Metalshub platform soared by 8% WoW and almost 22% MoM, confidently breaking through at 32.5 USD/kg Mo. The price of FeMo is the highest since Metalshub started tracking the index in January 2020. In addition to rising prices in China, market participants attributed the rise in ferromolybdenum quotations to delayed shipments from South America (Peru and Chile are the leading suppliers of molybdenum to the global market).
Higher raw material prices also pushed up ferrovanadium prices on the European market in May. The weighted average Metalshub FeV price index rose by 5%. According to market participants in China, the main driver of the global vanadium market, domestic prices have reached the peak and a pullback in quotations is most likley in the near future.
The chrome alloys segment has also seen a price increase. Market participants noted stable demand for chrome products in Europe, as well as ferroalloys' appreciation in China, as the main factors contributing to the price increase. On the Metalshub trading platform, the weighted average price index for high-carbon ferrochrome rose 6% in May.
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.
Weekly price indices for the following metals are currently available:
High Carbon Ferrochrome (HCFeCr)
Low Carbon Ferrochrome (LCFeCr)
High Carbon Ferromanganese (HCFeMn)
Manganese Metal Flakes (Mn Met Flakes)
Nickel Briquettes (Ni briqs)
Nickel Cut Cathodes 4x4 (Ni 4x4)
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