There has been a continuing decline in ferroalloys
production in the United States during the past decade, even as
overall global output has increased, according to the U.S.
Geological Survey (USGS).
The North American decline can be attributed to a number of
factors, including the shift of ferroalloys production to
ore-producing countries, the USGS said. This trend was clearly
observed by the 1980s, but U.S. production began to decrease as
early as 1970 and imports subsequently rose.
Increased global competition appears to be the primary
reason for the decline of the U.S. ferroalloys industry. As a
result, North American purchasers of ferroalloys are much more
at the mercy of the global market, which is moving dynamically
Demand has been spreading to the ferrosilicon and
ferromanganese markets as buyers try to buy silicon and
manganese units in alternative forms, one trader said.
But another trader said that while the market was relatively
tight, he didnt think the situation had worsened
significantly recently. There is definitely tightness and
I dont see the price going down anytime soon. But I
dont think its as oversold as people have said. I
wish it was, he said.
Chinas molybdenum output could fall this year as a
weaker steel market keeps prices low, according to an executive
at Jinduicheng Molybdenum Group Mining Corp. (JDC Molybdenum),
Chinas largest producer. Miners will inevitably
face losses or low profits with the increased resource taxes
and other costs rising, Nick Cao, vice general manager of
JDC Molybdenum Marketing Co., told delegates at an Asian
ferroalloys conference in Hong Kong earlier this year.
Chinas domestic prices failed to move notably higher even
after the government increased resource taxes on mining earlier
this year, he said. We expect production this year will
drop or growth will slow down, Cao said. The
Chinese market is full of uncertainties, so it is hard to say
how much (molybdenum output) will decrease. We estimate that
Chinas demand growth will also decrease this year, in
line with the lackluster downstream market.