SHANGHAI, China Chinese
ferrosilicon export market activity has increased significantly
due to a drop in the amount of material being smuggled out of
the country, market sources said.
Smugglers are more cautious
about shipping material via Vietnam to avoid a 25-percent
export tax due to stringent checks by Chinese customs
officials, a source at Erdos Metallurgy Group Co. Ltd. (EMG)
told AMM sister publication Metal
"A lot of (South) Korean buyers,
who usually purchase material from Vietnam, have resumed trade
with us over the past month," he said.
Chinas exports to South
Korea rose 36.5 percent to 9,099 tonnes in August vs. July,
customs data show.
Output cuts in western
Chinas ferrosilicon hub of Ningxia, along with reduced
profits from smuggled goods, also curtailed illegal trade, a
Gansu province source said.
"The average operating rate in
the area is around only 50 to 60 percent at the moment, so few
people are now willing to trade smuggled cargoes after the
prices of regular cargoes have fallen over the past few
months," the Gansu source said.
Export prices for illegal ferrosilicon are at $1,290 to
$1,300 per tonne, market sources said, close to the current
spot market level of $1,330 to $1,350 per tonne f.o.b.