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Platts
February 25, 2015
By Anthony Poole

US ferroalloys flat in vacuum of spot demand

Prices of US bulk ferroalloys were flat this week in a vacuum of spot demand, with signs of high-carbon ferromanganese coming under pressure as participants reported receiving low-priced, unsolicited offers of large tonnages.

The Platts weekly assessment of high-carbon ferromanganese fell to $1,020-1,035/lt, in-warehouse major US hubs, on February 25 from $1,025-1,035/lt on February 18.

A trader reported being offered "several hundred tons" at under $1,000/lt for prompt release on a cash, in-warehouse, basis, while two consumers said they had been offered similar quantities at around $1,010-1,020 delivered. Neither the trader or the consumers reported booking anything.

At the other extreme, some traders reported being able to sell truckload quantities for above $1,050/lt.

"I can buy standard ferromanganese for under $1,000, but that doesn't mean to say that's where the market is," said the first trader. "In any case, why would anyone buy ferromanganese speculatively right now when spot demand for it is non-existent?"

One of the consumer sources offered material said he had seen an increase in unsolicited offers. "I'm not sure what's going on, but it started last Friday, and it's continued this week, and it's from people I haven't heard from in a long time," the consumer source said. "I'm more than adequately supplied by my long-term contracts."

Several sources noted that the first quarter in the US steel industry -- often the strongest of the year -- did not look like being so this year, which several sources blamed on the flood of steel imports from China in the flat-rolled segment, as well as a drop in demand for pipe in the energy sector.

"I think things could pick up in April or May," said the first trader. "But if the first quarter does turn out to be the strongest this year, then we're all in trouble."

Silicomanganese prices were unchanged this week in an absence of transactions, bids, offers, or inquiries. The Platts assessment was unchanged February 25 at 56-57 cents/lb, in-warehouse major US hubs basis.

Several participants said they believed the antidumping inquiry into Australian silicomanganese could at least put a floor on the US price. Last week, US producer Felman Production, said it had filed an antidumping petition with the US Department of Commerce and the US International Trade Commission, asking for an investigation to be opened on silicomanganese imports from Australia.

A producer source said the effect on US silicomanganese prices could be similar to what occurred in ferrosilicon after a year-long investigation into ferrosilicon imports from Russia and Venezuela was launched in July 2013. Ferrosilicon prices rose from around 89-91 cents/lb to a peak of around 98-100 cents.

"I think, at the very least, it could put a floor on the price in the US, and could even bump it up a few cents," said the producer source. "That, alone, would more than pay the legal bills of Felman involved in filing the case, even if Felman's petition fails."