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October feroalloys price insights

Price increase in most commodity segments in the global ferroalloys market continued in October, however, with the rate of price growth slowing for the first time in months.

Market Insights

A post-pandemic recovery in global steel production appears to have exhausted itself by Q4 2021. According to worldsteel, global steel output rose by 7.8% to 1.46bn mt in the first 9 months of this year. However, in September, the figure fell by 9%, the main reason of which can be referred to China - the main driver of the global steel market. Chinese steel production fell by a record 21% to 73.8M mt in September, and even the generally good results in Germany (+10.7% in September), the USA (+22%) and Japan (+25.6%) could not correct the global picture.

The main reasons for the dramatic slowdown of the Chinese steel industry are stricter environmental controls and the unprecedented rise in energy prices.

In addition, industry experts and analysts are concerned about a sharp, V-shaped recovery in the world's leading economies from the end of 2020. Many of them believe the world is experiencing a repeat of the 2008-2009 scenario when the rapid growth of economies after the global crisis was followed by a year of stagnation.

However, this is a longer-term issue, while at the moment at least the European ferroalloys market continues to be in favour of the sellers.

Manganese and Silicon

Our survey during last month on ferrosilicon price forecasts in Europe collected a majority of votes (30%) in the €4,000-5,000/mt range, and rightly so. In October, ferrosilicon prices (75% Si min, 1.5% Al max) easily passed the €4,000/mt DDP threshold, approaching €5,000/mt DDP in some bids by the end of the month. Thus, the weighted average price index for FeSi on the Metalshub marketplace rose by 40% during the month and almost three times since the beginning of the year. In addition to the continuing supply shortage, prices are supported by rising energy costs, which have forced at least two producers in the EU to sharply reduce alloy output.

As before, the manganese metal market continues to show record price growth in the manganese product segment. Following national holidays in China (October 1-10), local plants not only failed to increase output but instead announced further production cuts due to rising costs and stricter environmental restrictions. In addition, the costs of shipping metals from China to Europe remains at least two to three times higher than last year. The weighted average price index for manganese metal flakes on the Metalshub marketplace rose by 20% in October.

The weighted average price indices for HC FeMn (75% Mn min, 8.5% C max, 0.25% P max) and SiMn (65% Mn min, 16% Si min) on the Metalshub marketplace rose by 6-8% in October, driven by higher world manganese ore prices, higher energy costs in Europe and higher demand ahead of the 2022 contracting campaign.

Noble and Chromium alloys

An Asian supply deficit had a corresponding impact on molybdenum prices in Europe in October. The FeMo weighted average price index on Metalshub rose by 4% during the month, coming close to August peaks. However, demand for molybdenum oxide from buyers in Europe was subdued, leaving the price virtually unchanged.

According to Metalshub's weighted average price index, ferrochrome prices in Europe rose by 10% on average during October. The main growth driver was higher energy prices. Ferrochrome export duties for Russia and Kazakhstan were lowered on 15th October but this is unlikely to result in a pullback in European prices as demand is likely to remain seasonally high until at least December.

Ferrovanadium prices in Europe increased slightly by the end of October. Stronger pricing in China and rebounding consumer demand in Europe resulted in the weighted average FeV price index on Metalshub to increase by 2% for the month.

About the Metalshub Price Index.

The Metalshub price indices are 100% based on real transactions, bids and offer from the digital Metalshub marketplace, 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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