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Indian producers of ferrochrome are seeing
good demand from European countries
Europe. In early February 2023, wholesale
ferroalloy prices in Europe increased due to production cuts and shipment
delays for some products. In particular, according to S&P Global, the
Malaysian Sakura Ferroalloys decided to suspend production of high-carbon
ferromanganese at one of its furnaces. The reason was the decrease in demand
for the product and non-compliance with the profit rate. The company’s plant in
Bintulu operates two furnaces with a total production capacity of 260,000 tons,
the enterprise is jointly owned by Assmang, Sumitomo and China Steel. This news
improved short-term sentiment in European ferromanganese markets in early
February. Offers in Europe by February 8 increased to €1160-1200/t DDP.
Assmang also announced the permanent
closure of its №1 furnace at its Cato Ridge facility in South Africa. The
furnace with a capacity of 40,000 tons of high-carbon ferromanganese per year
required serious reconstruction. However, due to deteriorating market
conditions and power constraints in Assmang, capital expenditures for repairs
are considered unjustified.
Market participants, according to S&P
Global, discussed power restrictions in South Africa, which affected production
in the region and led to delays in the delivery of ferrochrome contracted
volumes. End consumers were forced to return to the spot market, which caused
the price to rise at the beginning of the month.
Turkiye. After the earthquake in Turkiye,
Eti Krom, a subsidiary of Yildirim, suspended exports of ferrochrome and
chromium ore due to logistical problems, writes Argus.Media. This step was
caused by damage to the railway line from the mine and the company’s plant to the country’s southern seaports. The main export route
for Eti Krom is the port of Iskenderun, and the nearest alternative is the port
of Mersin, which is two hundred kilometers to the west. Turkiye, the
publication notes, is the world’s second exporter of chrome ore, and Eti Krom
is the largest producer in the country. A decrease in the supply of Turkish raw
materials may lead to a further increase in prices.
India. According to estimates of SteelMint,
in India, in mid-February, ferrochrome prices increased due to strong export
demand amid supply disruptions from major producing regions South Africa and
Turkiye. In particular, the South African company Transnet Freight Rail (TFR)
suspended some cargo transportation to neighboring countries.
Indian plants received numerous requests
from European countries. On February 13, Indian producers of ferrochrome began
to offer their products at a price of about 124-126 thousand rupees per ton
($1,500-1,524) EXW – compared to the end of the previous week, the price
increased by 3,650 rupees ($44). As a result, the final EXW Jajpur ferrochrome
price reached an eight-month high of around $1,513/t with a deal volume of
around 5,000 tons.
China. It is expected that the production
of high-carbon ferrochrome in China will increase by 6.3% m/m in February this
year – up to 525 thousand tons, according to SMM. Although the peak season in
the country has not yet arrived, demand will increase amid tight schedules for
stainless steel production. High prices for ferrochrome encourage producers to
increase or resume production. At the same time, chrome ore prices rose.
According to SteelMint, UG2 chrome ore was offered this week at $295/t, Turkish
– at $365/t on CNF China. Port delivery levels remain low and stainless steel
consumption has not improved. These factors reduce the profits of
ferroalloyers, so ferrochrome producers will take a wait-and-see position for
now.
China’s silicomanganese output in February
2023 is forecast to increase by about 3.6% m/m – up to 968.6 thousand tons. In
January, the increase in production was facilitated by aggressive stockpiling
by steelmakers before the Chinese New Year, which ensured quick orders and
shipments. At the beginning of February, the market gradually recovered after
the holidays, which will increase the demand for silicomanganese from steel
plants.
As GMK Center reported earlier, Ukrainian
ferroalloy enterprises in December 2022 increased exports of ferroalloys by
1.1% compared to the previous month – up to 30.8 thousand tons. On an annual
basis, the export of products of ferroalloy plants in December 2022 decreased
by 44.5% in natural terms.