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Ferrochrome prices up on producer push

Keywords: Tags  low-carbon ferrochrome

NEW YORK — Low-carbon ferrochrome producers, who have been unhappy with the narrow spread between low- and high-carbon ferrochrome prices this year and a growing discount to the European market, have been pushing up prices.

"There’s been a serious effort by the big producers to get the price up to a more traditional premium (to high-carbon ferrochrome), and it’s slowly gaining some acceptance from people," one trader said.

Prices for 0.10-percent low-carbon ferrochrome rose to between $2.13 and $2.17 per pound Thursday from $2.10 and $2.12 per pound previously. Prices had been stuck in a range between $2.08 and $2.12 per pound since mid-February.

The spread between 0.10-percent low-carbon and high-carbon ferrochrome has been around the low- to mid-90-cents-per-pound mark so far this year. This time last year, the spread was more than $1 per pound, and has traditionally been closer to the $1.10-per-pound level, according to sources.

"Producers were probably starting to ask themselves why they were even making low-carbon ferrochrome at those ($2.10-per-pound) prices," one market source said.

A recent uptick in European prices, led by one large producer raising its sales prices for 0.10-percent ferrochrome, according to sources, has also given domestic suppliers more confidence.

"(One large producer) announced that they were increasing their pricing to $2.30 per pound (this past week)," a second trader said, with the market source adding that transactions in Europe had already been concluded at close to the $2.30-per-pound mark this past week.

Most of the low-carbon ferrochrome in the United States comes from Russia and Kazakhstan; shipping costs mean the domestic market usually trades at a premium to European product, according to market sources.

Prices have been lower in the United States this year due to continued sales of stockpiled low-carbon ferrochrome by DLA Strategic Materials, and sources expressed concern about increased sales from the agency now that prices have risen.

"I think they might interpret it in the wrong way and start selling more material since they feel like there’s a shortage," the market source said, adding that while prices are rising on producer pushback, demand for the material has remained steady.

The price rise is "not consumption-driven," he said.

Other forms of low-carbon ferrochrome have also benefited from the price push, with 0.15-percent ferrochrome now trading between $2.06 and $2.11 per pound, up from $2.05 and $2.06 per pound previously, while 0.05-percent material is now between $2.33 and $2.38 per pound, up from $2.30 and $2.33 per pound previously.

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