European Ferroalloys Price Insights - April 2022
In April the European and global ferroalloys markets were characterised by contradictory sentiment and, consequently, price trends. On the one hand, the risk of shortages of some ferroalloys remains on the markets amid the Russian-Ukrainian war. On the other hand, steel production in key countries is declining. Despite good steel consumption figures, steel production in the EU fell by 8.5% in March, while in the first quarter the figure fell by 3.8%. It has a negative impact on demand for ferroalloys.
During this month, ferroalloys prices continued to rise in Europe since Russian supply of ferroalloys to Europe is now hampered by unprecedented sanctions that restrict export opportunities for businesses in Russia. These are high-carbon ferrochrome, which rose by more than 30%, ferrotitanium (+18%) and ferrosilicon (+13%). In the case of the latter, the increase in prices was due to Ukraine (one of the key importers to the EU market) and the extremely difficult delivery of products amid the military blockade of Ukrainian seaports.
Manganese and Silicon
Ferrosilicon was one of ferroalloys which continued to rise in price in April. Record-high electricity prices around the world and in Europe in particular are pushing the cost of the alloy up significantly. Over the year, energy costs have risen by more than fivefold in Europe. Consequently, FeSi production costs have risen 2.5-3 times by 2022.
The rise in ferrosilicon prices in Europe is also driven by continued difficulties in transporting Ukrainian products, as well as Kazakh alloys, due to EU restrictions on transport companies in Russia and Belarus (used by Kazakh suppliers as transit territories).
Nevertheless, by the end of April the growth of FeSi quotations in the market slowed down amid a sharp decline in demand. The weighted average Metalshub price index for the alloy rose by 13% in April, compared to a 23% increase a month earlier.
HC FeMn and SiMn segments in Europe were more balanced, reflected by more subdued price movements. For example, the weighted average price index for silico manganese on Metalshub rose by 2% during the month, while ferromanganese prices in real transactions on the Metalshub platform were almost unchanged on a monthly basis in April.
In the manganese metal market, the price decline slowed in April. The weighted average price index for manganese metal flakes on Metalshub decreased by 14% (compared to almost 50% decrease in March). The drop in price is still attributable to the congestion of the Chinese metal and manganese ore market.
Noble and Chromium Alloys
A ban on the movement of Russian trucks in the EU and the closure of European seaports to Russian-flagged ships imposed earlier this month as part of the fifth sanctions package are making exports of Russian chrome alloys much more difficult. During the month, the weighted average price index for HC FeCr on Metalshub rose by 37%. Meanwhile, the cost of low-carbon products, for which there are more alternatives to Russian alloy in Europe, did not change noticeably.
Ferrotitanium is also rapidly becoming more expensive in Europe (about a third of imports come from Russia). Thus, the weighted average price index for FeTi on Metalshub rose by 18% in April. At the same time, in the nearest future we should expect growth of demand for titanium products in Europe due to increase of orders from military-industrial complex amid growth of arms supplies to Ukraine by EU and NATO countries.
After reaching local peaks in March, ferromolybdenum, ferrovanadium and ferrotungsten quotations in Europe in April slightly receded. Apparently, fears of supply shortages following the imposition of sanctions on Russia did not materialise.
Nickel prices declined slightly in April, although they remain unprecedentedly high. Thus, the average premium to the exchange price of nickel briquettes on Metalshub decreased by USD 350, but is still 4 times higher than in January-February.
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