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American Metal Market & Metal Bulettin
AMM
June 2, 2014
By Daniel Fitzgerald

Silicomanganese mart eyes Felman; moly tags move up

NEW YORK - The silicomanganese market is awaiting the outcome of Felman Production LLC's attempt to restart production as well as a high-volume request for quotation (RFQ).

Silicomanganese suppliers are closely monitoring an RFQ from a major steel producer reportedly seeking up to 40,000 tons of material for several mills. The tender for the second half of 2014 is said to be closing June 2.

Market participants noted that Letart, W.Va.-based Felman's attempt to restart production at its plant in New Haven, W.Va., which has been hampered by a disagreement with its electricity supplier (amm.com, May 28), is likely to impact sentiment surrounding the RFQ and free-market prices.

"That (RFQ) should give a good indication of the market direction in light of Felman's return," one supplier source said. "It adds fresh uncertainty on this whole thing. (Felman's return) could lead to more consolidation of pricing in the next little while, but as long as there is uncertainty on Felman, I can't see why prices would go down until people know how they'll behave in the market, how much they'll produce, and so on."

"It all depends on what will happen with Felman," a second supplier source said.

Silicomanganese prices were assessed most recently in a range of 59 to 61 cents per pound.

A manganese supplier source reported that contract offtake remained "pretty brisk," noting that offtake volumes for May had exceeded company forecasts by 5 percent.

"All of the markets we service are good: energy markets are excellent, the stainless market is good, automotive is good. Some residential-construction-type products are picking up at a great rate," he said. "I don't think there will be many market-related shutdowns during the summer, and I think in the third quarter we'll see a strong raw steel production level due to pent-up demand."

Meanwhile, molybdic oxide and ferromolybdenum prices posted further gains on the back of ongoing spot supply tightness and strong demand.

Molybdic oxide tightened to a range of $14.90 to $15 per pound from $14.50 to $15 previously, while ferromolybdenum moved up to $18.50 to $18.75 per pound from $18 to $18.65.

One producer source told AMM he was hopeful that production gains would allow his company to participate more in the spot market toward the end of the quarter, adding that he was already looking to push ferromolybdenum prices beyond $19 per pound for truckload quantities.

"The question is how the traditional summer shutdowns will impact demand," the producer source said. "For now, customers still have strong order books."