The Platts assessment for high-carbon ferromanganese (76% Mn) rose to $1,045-1,070/lt, in-warehouse major US hubs basis, on January 29, from $1,030-1,050/lt on January 22.

A large steelmaker reportedly bought around 500 st for the balance of first-quarter delivery at around $1,045/lt, in-warehouse Pittsburgh basis. The steelmaker is also reportedly looking for additional spot ferromanangese for another one of its mills. Meanwhile, a trader reported selling 100 st to a consumer at $1,070/lt and truckload quantities at up to $1,080/lt, both in-warehouse.

The Platts assessment for silicomanganese (65% Mn) rose to 58-59 cents/lb on January 29, in-warehouse major US hubs basis, from 56.50-58.00 cents on January 22. A large steelmaker is in the market for second-quarter supplies and offers were said to have been made at above 60 cents/lb.

Another steelmaker was also reported to be looking for first- and second-quarter supplies of silicomanganese, despite having a multi-year contract in place with Felman Production, supplier sources said.

Despite the apparent increase in spot and quarterly requirements for US bulk alloys, several sources said it was not an indication of an overall increase in demand from the steel mills. "The difference, this year, is that some mills are not completely covered on long-term contracts," said a trader. "It's largely a result of Felman Production no longer producing silicomanganese, where they had been the incumbent supplier in previous years."

Since the beginning of this year, US steel mill capacity utilization has been hovering at between 76.1% and 76.6%, according to weekly data from the American Iron and Steel Institute. "The utilization is about the same as it was last January, so there's no overall increase in the amount of alloys the mills are using," the trader added.

A second trader agreed that mills were not fully covered with long-term contracts on silicomanganese and high-carbon ferromanganese. "It's worse on silicomanganese," the trader said. "But it's not all down to Felman not producing. I think a lot of the mills balked at the discounts on formulas they were being offered this year and resisted. But the suppliers also didn't cave, so contracts didn't get signed."

He said the mills had become accustomed to large discounts over the last few years: "They were expecting to get 6% discounts or more, and with extended payment terms, and it just wasn't happening this year, because the producers can't afford to keep losing money this year."

Some long-term contracts have reportedly settled with discounts at closer to 3% off independently published prices, including those of Platts.

The second trader said the supply gaps that mills faced were not small. "These are 500 ton holes here, or 1,000 ton holes there, or full bargeloads that the mills are going to be looking for," he said.  

A buyer at a large steelmaker recently confirmed that it was continuing to buy silicomanganese on a quarterly basis, largely because of Felman not producing and some dissatisfaction with the discounts being offered on long-term contracts. "We're not going to rush into long-term contracts if it doesn't suit us, and we're happy to keep a proportion of it spot, or quarterly," the buyer said.