China ferroalloy producers facing end-game over power pricing

Mar 20, 2009 | 10:02 AM |

The Chinese government's cancellation of electricity price discounts may have sounded the death knell for many ferroalloy producers in China who were already under pressure from low demand and prices.

Many ferroalloy producers are expected to cut production or close down, with higher electricity prices expected to add 300 to 400 yuan ($44 to $59) per tonne to ferrochrome producers' costs and 600 to 700 yuan ($88 to $103) per tonne for ferrosilicon producers.

China's ferroalloy production plunged to about 20 percent of capacity at the end of last year as the bottom fell out of the market, although it has gradually worked its way back to about 30 percent. "I think it may retreat to 10 to 20 percent in some areas in April," a Beijing trader said.....

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