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Steel market recovery supports ferroalloy prices in Europe

Ferroalloy prices in the European market moved in different directions during January. According to Metalshub Price Indices, the bulk ferroalloys market (manganese and silicon alloys) continued its rise since the end of 2020. This was driven by increased demand in the absence of sufficient free volumes of the material. At the same time, price dynamics for noble and chrome alloys were moderate, with quotations on average almost unchanged during January.

Market Insights

Manganese and Silicon

High-carbon Ferromanganese and Manganese metal rose most noticeably in January. Thus, having returned from the season holidays, many European foundries and steelmakers started spot purchases of HC FeMn, especially as the steel market dynamics are favorable for this. According to Worldsteel, EU steel output in Q4 2020 not only grew by 20% QoQ but also unexpectedly showed a YoY increase of 6%. Steel output in Germany exceeded Q4 2019 by 9%.

At the same time, high-carbon ferromanganese producers made it clear that they sold out most of their production back in November and December as part of long-term agreements for 2021 and currently have no free volumes available. This pushed alloy prices up. Metalshub's weekly weighted average price index for HC FeMn rose by 13% during January.

Manganese metal flakes prices have not only not stopped rising since late November 2020 but have instead surged in January by 34% on the back of increase in demand in the EU, according to Metalshub's Weekly Price Index. Prices continue to be supported by similar price increases in China (the main supplier of manganese metal to the global and European markets), as well as continued container shortages, with freight costs on the China-Europe route rising by almost another $2,000 per container in January.

Appealing to increased buying activity and a lack of free volumes available, European ferrosilicon suppliers also continued to attempt price rises in January. However, as before, the increase in actual transaction prices lagged behind the rate of increase in supply prices. The weighted average weekly FeSi price index, based on transactions made on the Metalshub platform, rose by 7% in January.

Molybdenum, Vanadium and Chrome

Noble and chrome alloy prices in Europe did not change significantly during January. FeMo price stabilised following the disappearance of the speculative factors that allowed suppliers to raise prices in the autumn of last year. During January, the FeMo Price Index remained almost unchanged. The situation in the chrome alloy market was similar, with both high and low-carbon ferrochrome in the European market unchanged in price.

The ferrovanadium market remained fairly balanced, although the price increase in China did have some impact on the European market, with Metalshub's FeV price index rising by 10% in January.


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