NEW YORK Low-carbon ferrochrome prices have weakened slightly on light spot demand, aggressive selling by some traders, and the impact of DLA sales.
Prices for 0.05-percent material slipped to $2.21 to $2.24 per pound from $2.22 to $2.25 previously, while the range for 0.10-percent carbon ferrochrome narrowed to $2.06 to $2.08 per pound from $2.06 to $2.09.
Traders told AMM that spot market activity has been especially quiet during the past week, with some citing the Passover and Easter holidays but many others lamenting a more sustained industry slowdown.
"The price here in the U.S. is too low and were trying to bring it up in balance with the rest of the world, but theres simply a lack of demand and limited spot inquiries," one trader said. "Most of the major spot buyers from the end of 2012 have been converted into contract buyers, and there arent enough new orders being generated to cause them to come pick up on the spot market."
"Business has slowed down dramatically," a second trader said. "Ive been traveling non-stop over the past few weeks. I called 65 foundries that we do business with, and every single one said that business was steady or slowing down. Not one of them said that business was good. Most of my customers tell me theyre running at around 65 to 75 percent of capacity. And the demand that is out there is being taken care of by contract business."
Both traders said that 0.13-percent carbon ferrochrome sold by the DLA was typically being blended and then resold as 0.10-percent material at prices that undercut the rest of the market.
"Everyone knows about it and no one complains, but that has hurt pricing. There is simply not enough low-carbon demand to eat up all of that DLA tonnage and then some. As much as wed like the low-carbon prices to go up, its difficult when the DLA (sales) put a ceiling on the market," the first trader said.
The DLAs most recent offering840,000 pounds of 0.13-percent carbon ferrochrome and 840,000 pounds of 0.15-percent materialclosed March 20 (amm.com, March 19).
There also were unconfirmed reports of high-carbon ferrochrome selling below AMMs published range of $1 to $1.05 per pound.
"All that talk that high-carbon ferrochrome is supposed to go up, its a load of crap," the second trader said.
"Were just waiting for a blip in demand," the first trader said. "Theres not much inventory here of high-carbon ferrochrome, so if demand picks up prices could jump 5 to 10 percent."