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American Metal Market
AMM
July 29, 2014
By Daniel Fitzgerald

FeSi decision unlikely to affect prices

NEW YORK - The Commerce Department's decision not to impose anti-dumping duties on U.S. imports of Russian ferrosilicon is not expected to impact the domestic market until 2015 contract negotiations begin later this year, market participants said.

Commerce last week issued a final determination confirming its preliminary negative ruling (amm.com, July 25).

"The preliminary decision was made in March, and the market has already absorbed that information," one supplier source told AMM. "I think the market was prepared for status quo; it would have reacted more if the decision had been changed."

Suppliers said the decision is unlikely to prompt a sudden surge of imports that would upset the supply-demand balance, but it could impact spot pricing later in the year.

"(They) have formula sales, so they don't want to push prices down as it affects their bottom line," a second supplier source said.

"It wouldn't be in their interest to crush the market," a third supplier source said.

The timing of the announcement was opportune, considering that most contract business for the second half of 2014 has already been concluded and spot business in the current quarter is expected to be scant, many sources noted.

"By the time we get to fourth-quarter negotiations, the market will have fully absorbed this news. The timing of it is perfect to have the minimal influence on the market," the first source said.

"This is a 2015 event," the third source said. "You're not going to drum up more business now when there's nothing to drum up."

However, a fourth supplier source cautioned that spot prices could weaken if importers choose to "vehemently defend their market position," or if further trade sanctions are imposed against Russia. "I don't think the floodgates will open, but they do have the potential to bring in substantial tonnages and weaken the market," he said.

AMM’s ferrosilicon spot price assessment July 25 was 94 to 98 cents per pound.