Ryan’s Notes
September 26, 2014

Global FeSi markets on watch list

Buyers and sellers were closely monitoring the US and European ferrosilicon markets this past week. In Europe, sources indicated that current contract negotiations and supplemental spot transactions were adding some pressure to current prices. Prices have moved higher on the heels of multiple deals, to €1,150-1,190 per mt, DDP. The market was especially tight for specialty grades, due to restrictions in Brazil, while some imports of lower quality material were still being cited as a bit of a drag to the apparent rise in price for standard grade ferrosilicon in Europe.

Meanwhile, other sources reported that the European ferrosilicon market was becoming overvalued, specifically by buyers who noted favorable energy rates and supply stability for imports. It appeared that caution with regard to the Ukrainian and Russian conflict may have been unfounded, as there were no direct effects noted so far in the European ferrosilicon market.

Anna Fleming, Editor of CRU Bulk Ferroalloys Monitor, reported, "Ferrosilicon supply concerns resulting from the crisis in Ukraine have been eased. Nonetheless, some European buyers are willing to pay a premium for security of certain deliveries and quality, particularly given that specialty grade ferrosilicon from Brazil is less available in the market. As a result, quarterly contracts are becoming increasingly favored over spot deals, and prices are gradually moving up toward €1,200 per mt, DDP."

The US market was still teetering. In the past week, substantial sales volumes were noted within the current CRU Ryan's Notes' range, while some smaller volumes were concluded on both sides of the range.

With what some perceived as the end of the anti-dumping suit against Russian and Venezuelan ferrosilicon, many anticipated that the prices would fall abruptly. In the next week, US market participants will get word as to whether Globe and CC Metals and Alloys' appeal of the ITC ruling on Russian ferrosilicon will move forward, and what the next steps will be, as well as a report on the previous findings of the same trade case.

Meanwhile, some sources have become concerned about high imports, although others expect Chinese imports to wane through the end of the year. This could follow now that the Russians and Venezuelans are likely in the clear. This is not likely to be the case with imports, at least not in the near term, to put claims to rest that the market has become oversupplied.