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Low river levels hurt ferroalloys market

Keywords: Tags  river levels, low river levels, FerroAtlántica, ferroalloys, barge transport, Thorsten Schier


NEW YORK — Low water levels along the Mississippi River are starting to affect ferroalloys traffic, market sources told AMM.

“We are certainly going to have this next barge affected. Our customers will be supplied, but it’s certainly going to cost money to make that happen,” a source at ferrosilicon producer FerroAtlántica Group SA told AMM, adding that the company would likely have to transport material by rail or truck rather than by barge.

One trader told AMM that he had experienced delays in shipping material, but that there had been little impact—“yet.”
Some market sources who are expecting material early in 2013 expressed concern.

“I will be affected (if the situation persists), because I have material coming in the first of the year,” one supplier source said.
Sellers with long-term contracts could see a squeeze on their margins.

“If you have contracts, you’re going to eat it. It’s not like you can declare force majeure or anything,” one ferrosilicon market source said.

Should the situation continue much into the new year some sources said that a surcharge system could be implemented.
In addition, the upcoming cold weather is a source of concern.

“Then you’ve got icing issues,” the source at Madrid-based FerroAtlántica said.

The  Institute of Scrap Recycling Industries warned last month that all barge traffic on the Mississippe River between St. Louis and Cairo Ill.could come to a halt by Dec. 10 unless the U.S. Army Corps of Engineers takes emergency action to ensure water levels do not fall below what is necessary to support inland waterway navigation, barge transport (amm.com, Nov. 28).

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