Buyers of bulk ferroalloys are willing to source material for delivery in six months, as long as suppliers are willing to sell at today’s low prices.
Raw materials buyers at North American steelmaking firms say there is such an inventory overhang that ferroalloys can be obtained quickly, and at very inexpensive prices. Near-term demand is so weak that October tags had fallen dramatically since January: Ferrochrome is 27% cheaper while ferrosilicon, ferromanganese and ferrovanadium are all 11% cheaper. Only ferromolybdenum is about the same price.
Steelmaking capacity utilization has been under 75% for most of the year, and that has cut demand for ferroalloys and other steelmaking materials. “Near-term purchasing activity is mirroring the steelmaking business and right now the steel business is not that good,” says a New York trader. “Some of the purchasing is for six months from now,” he adds, “but with most commodity prices are at historical lows, sales prices for those future deliveries are at historical lows.”
Market sources note the entire bulk ferroalloys market is being “poisoned” by oversupply. The vast majority of ferroalloys enters the U.S., market through traders since the bulk of supply is made in Europe and Asia.
Source: Purchasing Magazine
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