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Ferrosilicon prices rise on short supply

Keywords: Tags  ferrosilicon, ferrosilicon prices, Outokumpu Stainless, China ferrosilicon, ferrosilicon imports, Thorsten Schier

NEW YORK — A tightness in ferrosilicon supply has led spot prices to increase 1 percent, market participants told AMM.

Prices are now in a range of 95 to 97 cents per pound compared with 94 to 96 cents previously, with Outokumpu Stainless USA LLC reportedly paying within the new range for second-quarter tonnages in a recent tender.

"(Outokumpu) had to retender twice before they could get second-quarter material," one trader said, adding that the tender was for about 2,000 tonnes.

"Ferrosilicon is finally livening up. It’s really, really tight."

The shortness of material is occurring at the same time as the stainless mill is ramping up its melt shop (, Dec. 10).

"I think the (Outokumpu) mill has sucked a lot of material out of the market," a producer source said.

Outokumpu declined to comment.

Rising ferrosilicon prices—up from 85 to 90 cents per pound at the start of the year—and tight supply have led domestic producers to look at the commodity-grade market with greater interest (, March 22).

Low prices toward the end of 2012 sparked the tightness, which sources said prevented traders from bringing material in from China, traditionally a large supplier to the domestic market.

Confusion over a possible reduction in the Chinese export tax on the product also crimped interest.

"Everybody was afraid to buy material until the situation became clear that it wasn’t the case," the trader said.

U.S. imports of ferrosilicon from China totaled only 328 tonnes in January vs. a monthly average of 3,131 tonnes during 2012, according to the latest figures from the Commerce Department and U.S. International Trade Commission (ITC).

While some sources said prices above $1 per pound, last seen in early October 2011, were possible in the near term, others were more skeptical due to tepid steel production numbers so far this year.

"I don’t think we’re going to go over a dollar because the consumption is just not there. (The first quarter) didn’t come through," a second producer source said, adding that imports from European producers also might start increasing due to rising domestic prices.

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