TELF AG analyzes Fluctuating Prices and Uncertain Demand in Ferro-Alloy Markets – May, 25 2023
Mixed trends
The global ferroalloy markets have experienced mixed trends in recent weeks, with various factors influencing the prices of different alloys. This article provides an overview of the current state of chrome ore, high-carbon ferrochrome (FeCr), manganese ore (Mn ore), and ferrosilicon (FeSi) markets, shedding light on the factors driving the fluctuations and their impact on the industry.
Chrome Ore: Rising Prices and Inventories
UG2/MG chrome ore prices have continued to rise, albeit slower, supported by low inventories at main Chinese ports. However, concerns have emerged about inventories climbing in the second half of the month, potentially leading to increased push-back from buyers regarding prices. This rise in chrome ore prices has had a negative impact on the buy-side, with input costs remaining high and resulting in reduced purchasing activity. Furthermore, the increase in ferrochrome prices in the Chinese spot market has not offset the increased production costs.
FeCr: Depressed Sentiment and Falling Prices
High-carbon ferrochrome markets have witnessed a depressed sentiment, with buyers and sellers reporting falling prices. To maintain liquidity, sellers have decreased their offer levels due to consumers no longer being able to afford higher prices. Higher-grade (65-70% Cr) material prices have been particularly affected, moving closer to early 2023 levels. In contrast, lower-grade (60-64.9% Cr) material prices have remained unchanged, with limited spot activity reported. The US high-carbon ferrochrome market has also experienced downward pressure on spot pricing due to weak demand from steel mills and foundries, leading to a sluggish spot market with the potential for further declines.
Mn Ore: Stable Prices Amid Future Demand Concerns
Manganese ore prices have remained stable in bi-weekly seaborne and port markets, although concerns about future demand persist. Downstream demand for steel is a key factor influencing the market. While weekly prices have seen some reductions, the average weekly port prices for high-grade and semi-carbonate ore have experienced a minor decline. Port trade has remained active, driven by improved margins resulting from recent falls in ore and coke prices, encouraging increased output and demand for ore.
FeSi: Slipping Prices and Uncertain Market Outlook
European FeSi spot prices have slipped lower due to thin trade and a slow spot market. Despite the news of several steel mills restarting operations, this has yet to translate into immediate price support. The market remains weak, and reports suggest that even though one furnace was restarted, it may stop again shortly, adding to the uncertainty.
In conclusion, the ferroalloy markets have experienced varied trends in recent weeks. Rising chrome ore prices have impacted buyers’ buy-side and led to reticence. On the other hand, high-carbon ferrochrome markets have faced depressed sentiment, resulting in falling prices for higher-grade materials. Stable prices have characterized the manganese ore market, while the FeSi market has witnessed slipping prices and uncertainty due to a slow spot market. The future trajectory of these markets will depend on factors such as inventories, downstream steel demand, and the overall economic outlook. Market participants will closely monitor these developments to make informed decisions in this dynamic industry.
