TELF AG Ferro-alloys Market Update Silicomanganese – SiMn – Markets June 15, 2023
In the face of declining commodity prices worldwide, the SiMn (silicomanganese) market has experienced another month of negative price indicators. As most commodities witness a decrease in prices across multiple markets, the ferroalloy sector has been directly affected. With steel production on the decline, the demand for ferroalloys, including SiMn, has also taken a hit.
Spot markets in Europe and the United States have remained relatively quiet, as long-term contracts have been able to meet the buying needs of most steel plants. The decreased activity in these markets reflects the overall lower requirements for ferroalloys in the current market environment.
While challenges persist, there have been some positive developments within the ferroalloy industry. Alloy production has shown an increase compared to the first quarter, suggesting a potential stabilization of the market. Moreover, there are reports indicating that the Nikopol ferroalloys plant in Ukraine, which previously faced operational issues, has resumed its operations. This reopening is expected to contribute to the overall supply of ferroalloys, providing some relief to the industry.
However, even in the growing Indian market, activity has been subdued. With stocks of finished steel remaining high and the monsoon season approaching, the demand for steel is expected to decrease further. The monsoon season traditionally brings about lower demand in the construction and infrastructure sectors, which in turn affects the demand for steel and its related ferroalloys.
China, which experienced strong steel production levels in the first quarter, partially supported by direct and indirect exports, is now facing a slowdown in its steel industry. Although rebar output has not been consistently strong throughout the year, its decline has contributed to weaker demand for silicomanganese. Additionally, ore stocks remain high, and the supply from Gabon has resumed after earlier disruptions, once again flowing into China.
The current market conditions present significant challenges for the ferroalloy industry. The decrease in global steel production, coupled with high stocks of finished steel and weakened demand in key markets, has put considerable pressure on the sector. In light of these challenges, industry players must closely monitor market conditions and adapt their strategies accordingly.
In conclusion, the SiMn and ferroalloy markets are grappling with the impact of falling commodity prices and reduced steel production. The negative price indicators and decreased demand for ferroalloys reflect the current market conditions. Despite some positive developments such as increased alloy production and the reopening of the Nikopol ferroalloys plant, subdued activity in key markets like India, coupled with the slowdown in steel production in China, continues to weigh on the industry. Adapting to the changing market dynamics is crucial for industry players to navigate these challenges successfully and secure long-term viability in the ferroalloy market.
