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The market for downstream ferro-alloys —
including ferro-chrome, silicon-manganese, ferro-manganese, ferro-silicon and
vanadium — should remain weak after the Lunar New Year due to oversupply,
sources told Fastmarkets. But the market for alloy ores, such as chrome ore,
manganese ore and tungsten concentrates, should remain with stronger
fundamentals after the February 10-17 holiday, sources said.
Chrome ore vs ferro-chrome
Robust demand and tight supply in the
chrome ore seaborne market will remain even after the Lunar New Year, giving
support to prices, market participants said.
“Even though China’s December chrome ore
imports reached a monthly record high, port stocks of commercially tradeable
materials remain low,” one international chrome ore supplier told Fastmarkets.
“After the Lunar New Year holiday, strong
fundamentals will continue, given the high capacity utilization rate in Chinese
smelters,” the supplier said.
According to China’s customs data, the
country imported 1,996,209 tonnes of chrome ore in December, a record high in
monthly imports, up by 10% month on month and by 52% year on year.
Chrome ore is smelted into ferro-chrome,
which is mostly used in the production of anti-oxidation and
corrosion-resistant stainless steel.
One Chinese ferro-chrome trader source told
Fastmarkets that the ferro-chrome output in January should be around 0.7
million tonnes and will likely remain at this level in February.
“High ferro-chrome production rates support
the chrome ore market,” the trader source said. “However, it will result in a
weak ferro-chrome market, with tepid demand from stainless steel mills.”
Due to new capacity coming online,
ferro-chrome supplies in China — especially in Inner Mongolia, a ferro-chrome
production hub — are high, the trader source added.
“It is hard to say in which direction the
market will go,” a ferro-chrome smelter in northern China said. “It will be
determined by stainless steel prices after the [Lunar New Year] holiday.”
Taiyuan Iron and Steel Company (TISCO), a
key stainless steelmaker in China, announced on Tuesday January 23 that it
would roll over its January ferro-chrome tender price, which has been 8,295
yuan ($1,155) per tonne since December.
Manganese ore vs silicon-manganese,
ferro-manganese
Manganese ore supply to China was high
throughout most of 2023; Fastmarkets’ manganese ore 44% and 37% price indices
fell in the same period.
But prices have increased since late
December due to increased restocking by Chinese manganese alloy smelters, along
with decreasing port stocks and potential supply reductions from South African
miners.
“The fundamentals of the manganese ore
market have improved,” one manganese ore seller source said, “and this may
remain after the Lunar New Year holiday, with smelters coming back from the
long holiday to replenish ore stocks.”
Fastmarkets’ assessments of manganese ore
stocks at Qinzhou and Tianjin ports were in the range of 4.80-5.05 million
tonnes on Monday January 22, compared with 5.08-5.27 million tonnes on January
15, with stocks dropping for five weeks in a row.
Manganese ore is smelted to manganese
alloys, including silicon-manganese — which is an important raw material during
the production of construction steel products — and ferro-manganese, which is
added during flat steel production.
The Chinese manganese alloy market remained
weak, with lingering oversupply and poor performance in end-use industries,
according to sources.
“Without massive production cuts in
manganese alloys, the silicon-manganese market will be weak after the [Lunar
New Year] holiday,” a manganese alloy trader source in China told Fastmarkets.
A manganese smelter source said that
bearish sentiment in the manganese alloy market will remain in February, adding
that “with poor performance in the property sector, demand for long steel will
hardly rise after the Lunar New Year; in other words, demand for
silicon-manganese will be reined in.”
Unlike in the silicon-manganese market,
“the ferro-manganese market should be relatively stable before and after the
holiday because of firm demand from its end users, such as the automotive and
shipbuilding industries,” a second manganese smelter source said.
Tungsten vs vanadium, ferro-silicon
The market for upstream tungsten
concentrates will likely continue with bullish fundamentals because of
potential production cuts during the Lunar New Year holiday, sources said.
Some Chinese producers of tungsten
concentrates might cut production due to maintenances and checks in their
facilities during the holiday, sources added.
A tungsten trader said that tighter spot
availability is expected to support spot prices after the Lunar New Year,
although there should be no obvious improvements in the mainstream downstream
demand from the hard-alloys sector after the holiday.
“The market for tungsten concentrates has
been tight for quite some time, especially for higher-grade tungsten
concentrates,” a second tungsten trader said. “I hear there will be some
tungsten concentrates production cuts from mid-January to the end of February —
this could exacerbate the already tight spot availability.”
The overall Chinese ferro-silicon market
may remain oversupplied after the Lunar New Year holiday, sources said.
“Most ferro-silicon is used in the
steelmaking industry. So far, we do not see signs of recovery in the real
estate industry,” a China-based ferro-silicon trader said. “Housing prices in
first-tier cities such as Beijing, Shanghai and Guangzhou have declined by
several million yuan; most people still take a watchful attitude in purchasing
houses.”
Sources said that the price for Chinese
vanadium will rise only if vanadium battery technologies progress after the
Lunar New Year, resulting in more vanadium demand; otherwise, vanadium should
maintain a weak momentum.
“It is unlikely that the vanadium price
will rise after the Lunar New Year, given current sluggish downstream steel
demand, unless vanadium battery projects are installed and applied on a larger
and wider scale — which would, to some extent, drive up upstream vanadium
demand,” a China-based vanadium trader source said.