NEW YORK Ferroalloys market participants expressed relief about the fiscal cliff deal, noting that while some issues remain unresolved at least the tax structure is clear.
"Investors wont commit money until they have some idea of where things are going. The tax issue sort of comes off the table," one market source said. "Now we know what it is; now we go on and live with it."
"The fiscal cliff resolution helps to get things moving," a source at a ferrosilicon supplier said. "Now we have a little more clarity. (Also), not letting it go over was a plus."
Most ferroalloy sources expect strong first-quarter demand, similar to early 2012, when prices for most alloys rose as consumers restocked and low imports kept material tight.
However, some expect demand to fall off toward the end of the first quarter, coinciding with discussions about the debt ceiling and defense spending cuts.
"(The resolution to the fiscal cliff) was positive, though it looks like theyre going to have another fiscal cliff in another couple of months," the market source said.
"Were just waiting for the bump-up, and then well sell into strength and itll fall off a cliff. Well have our own alloy cliff," one trader said.
However, the ferrosilicon supplier source expressed little concern about whether the remaining issues would be resolved or postponed further. "The government is used to kicking the can down the road," he said.