NEW YORK Medium-carbon ferromanganese prices have dropped to their lowest level in nearly four years, flummoxing traders who believe that market fundamentals should not have engendered a price dip.
AMMs medium-carbon ferromanganese price range is 84 to 86 cents per pound, down from 86 to 88 cents previously, with unconfirmed transactions reported below 84 cents per pound.
It is the lowest trading range for medium-carbon ferromanganese since August 2009, when the product was between 80 and 85 cents per pound. While traders acknowledged that spot trading activity has been scarce, some were confused by the price drop.
"I thought there was some sentiment that medium-carbon would go up. Ive been checking the import records and no one has been bringing it in. Medium-carbon material is in so few hands," one trader said.
Data compiled by the U.S. Commerce Department and the U.S. International Trade Commission indicates a marked drop in medium-carbon ferromanganese imports in the first five months of 2013 compared with last year.
A total of 3,624 tonnes (3,995 tons) were imported into the United States in May and 6,345 tonnes (6,994 tons) in April vs. 9,832 tonnes (10,838 tons) in May 2012 and 11,179 tonnes (12,323 tons) in April 2012, according to the most recent available data. Year-to-date imports of 16,718 tonnes (18,428 tons) were down 35.2 percent from 25,803 tonnes (28,443 tons) in the first five months of last year.
"There are only small opportunities on medium-carbon. The third-quarter buying has been done, and now theres very little spot activity going on. You would see more spot activity if consumers had underestimated their requirements, but we dont see that," a second trader said. "I would define this as a good period to do some forward planning for the fourth quarter, in anticipation of fourth-quarter business being a bit stronger."
A third trader said he believes the medium-carbon market is being pulled down by a company selling at low pricesin order to pull published prices downrather than market fundamentals similar to that recently reported in the silicomanganese market (amm.com, July 12).
"You cant even get Chinese material for 83 cents per pound," he said. "As much as suppliers want to do business with people and sell product, there is a limit."