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September ferroalloys price insights

The ferroalloys market stabilised in early September, with some product segments rebounding from the unprecedented price rally of the summer months.

Market Insights

However, from mid-September it became clear - the record price rally in the world ferroalloys markets is not stopping. Instead, there was only a small pause before a new round of appreciation.

However, it cannot be said that this price increase is underpinned by fundamental factors. Indeed, steel output is recovering steadily in all key regions of the world however production level is still not comparable to pre-pandemic levels. That is, normal consumption levels are recovering with no increase in demand. Furthermore, several bulk ferroalloys producers in Asia (primarily in Malaysia and China) are operating at reduced capacity utilisation. However, China is not a big exporter (except for manganese metal and some noble ferroalloys), and Malaysia is far from being the only global exporter.

Thus, the main arguments for suppliers remain the high cost of freight and the long delivery time of products from Asia. Everything else looks like a speculative attempt to stir up the markets. As further proof, unlike in the manganese and silicon segments, chrome and noble alloys did not rise in prices in September.

Manganese and Silicon

After a short pause in early September, ferrosilicon (75% Si min, 1.5% Al max) prices in the European market hit a new psychological mark of €3,000/t DDP by the end of the month. From the beginning of Q3, the alloy quotations in the region grew by 42%, and in annual terms by almost 3 times, as seen in the FeSi weighted average price index on the Metalshub marketplace.

By the end of September, the largest producer in Europe had to shut down two furnaces due to rising energy prices, which also boosted FeSi prices in the short term. Against the backdrop of record price increases, some European buyers have already started purchasing products for Q1 2022 in September, a month earlier than usual.

In the segment of manganese products, manganese metal continues to break price records. Chinese sellers, who supply more than 90% of European consumption, continue to cut production. In addition to traditional environmental restrictions, plants in China were ordered to reduce emissions (and therefore production) ahead of national holidays in early October. The weighted average price index for manganese metal on the Metalshub marketplace rose by 10% during the month.

Despite a generally stable price situation in the manganese ore market, prices for bulk manganese alloys did increase on the back of rising Asian prices and production costs in Europe. The weighted average price index for HC FeMn (75% Mn min, 8.5% C max, 0.25% P max) on the Metalshub marketplace rose by 9% in September, while the price index for SiMn (65% Mn min, 16% Si min) added around 3%.

Noble and Chromium alloys

In contrast to manganese and silicon, the chrome and noble ferroalloys markets did not show noticeable price fluctuations in September, although the recovery in stainless steel output was on par with that in the carbon products segment. Additionally, despite the increase in quotations in the bulk alloys market in china, global chrome or molybdenum alloys prices were not affected.

European FeMo prices continues to fluctuate within the previous range in September, with the FeMo weighted average price index on the Metalshub marketplace falling back by 3% in September and a similar trend was seen in the segment of molybdenum oxide products.

Ferrochrome prices in Europe rose only in euro equivalent in September. The weighted average price index for HC FeCr on Metalshub rose 1% and for LC FeCr 6%. Whereas in dollars, due to exchange rate fluctuations, prices were almost unchanged. It is worth noting that the price hike for chrome products in August was due to higher export costs from Russia and Kazakhstan (key importers to the EU) after the introduction of temporary export duty in those countries. The same reason led to an increase in the cost of ferrotitanium. However, this month the Russian government announced its intention to reconsider its decision and reduce or even abolish the imposed duties altogether, which immediately cooled the excitement in the markets.

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

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