NEW YORK Ferrosilicon
prices have strengthened as rising replacement costs from
China, one of the largest suppliers to the U.S. market, have
crimped shipments from that country and led to some tightness
in the domestic market.
Prices are now between 89 and 91
cents per pound, up from 85 to 90 cents previously, with
significant inter-trade business reported at the upper end of
the range in the past week.
Sources said that prices might
need to rise even further to make Chinese material competitive
"Hitting those numbers (current
price levels), they (traders) cant get a replacement out
of China. Now theyre out of material," one supplier
"Prices in China are moving up
due to tight supply until the Chinese New Year (in February),"
a trader said. "Current f.o.b. levels are $1,360 to $1,390 per
tonne (82 to 84 cents per pound), up $30 to $40 over the past
Sources said that including
logistics costs, this would put material in a domestic
warehouse in the low- to mid-90-cent-per-pound range, at or
even above current price levels. As a result, exports of the
material from China, which in the past has been one of the
largest sources for domestic traders, have dried up.
Only 200 tonnes of ferrosilicon
made their way from the Asian nation to the United States in
October compared with 3,169 tonnes in the same month a year
earlier, according to the latest U.S. Customs figures. Chinese
shipments in the first 10 months of last year totaled 31,944
tonnes, down 39.7 percent from 52,990 tonnes in the same period
Sources were optimistic that the
relatively tight supply and customers expected
first-quarter restocking would lead prices to rise further.
"Im bullish on the first
quarter. I see this thing running up to the mid-90s," the
supplier source said.