TELF AG on FeSi Prices Experiencing a Decline in the US Market Amidst Global Downtrends – July 23, 2023

A critical alloy

Ferrosilicon (FeSi) is a critical alloy used in various industrial applications, primarily in the production of steel and cast iron. However, the FeSi market in the United States has recently witnessed a decline in prices due to lower concluded business and the presence of cheaper alternatives in the market. This article will discuss the factors contributing to the price drop and the broader implications for the industry.

US FeSi Prices Witness Decline:

In the past week, the United States’ FeSi market experienced a significant downturn as prices fell on the back of reduced concluded business. The decline came as no surprise, given that the US market had been slow to mirror the downtrends seen in other global markets. Industry experts had been anticipating this correction for some time, given the challenging economic conditions and overall uncertainties that have affected various sectors.

Limited Spot Requirements and Lackluster Demand:

One of the primary factors contributing to the drop in FeSi prices is the limited spot requirements from buyers. Lackluster demand has been plaguing the industry, leading to reduced purchasing activities. With buyers showing a lack of urgency in acquiring FeSi, sellers have found themselves with excess inventory, forcing them to lower their prices to attract potential customers.

Sufficient Contract Coverage and Formula Pricing:

Furthermore, the current situation has been exacerbated by sufficient contract coverage. Many buyers already have existing contracts for FeSi, which has dampened the demand for spot purchases. With adequate coverage from their contracts, buyers have less need to engage in spot transactions, adding to the downward pressure on prices.

In addition to contract coverage, sellers have opted to fulfill spot requirements using formula pricing instead of fixed pricing. Formula pricing allows for a more flexible approach to determining the price of FeSi based on various market factors, including the cost of raw materials and prevailing market conditions. As a result, this pricing strategy can lead to more competitive prices, particularly when the market faces a supply surplus.

In conclusion, the recent decline in FeSi prices in the United States reflects the challenges faced by the industry amid lackluster demand and the availability of cheaper alternatives. With limited spot requirements, sufficient contract coverage, and a preference for formula pricing, suppliers have been compelled to adjust their pricing strategies to remain competitive. As the industry navigates through these uncertainties, proactive measures and a keen understanding of market dynamics will be essential for sustained growth and profitability.