NEW YORK Ferrosilicon market participants have cast doubt on U.S. producers ability to cover the needs of domestic steel producers, although imports are likely to make up the balance.
The U.S. International Trade Commission (ITC) voted to continue an anti-dumping investigation into ferrosilicon imports from Russia and Venezuela, issuing a preliminary determination that the domestic industry could be materially injured by such imports (amm.com, Aug. 30).
The investigation follows a petition filed July 19 by Calvert City, Ky.-based CC Metals & Alloys LLC and New York-based Globe Specialty Metals Inc. that targets ferrosilicon primarily handled by Ferroatlantica North America Inc. and Russian Ferroalloys Inc.
A source familiar with the case said the investigation has created supply concerns for consumers in the steel sector. "What will happen is the domestic producers do not have enough capacity to supply the market, so the steelmakers are deeply worried and are already starting to take positions," he said.
Market participants contacted by AMM agreed with this assessment, although some noted that the supply gap was likely to be filled by ferrosilicon from other countries.
"Its true (the domestic producers) cant fill it, unless Globe changes their furnaces to produce ferrosilicon," one trader said.
"If the domestic industry would have to supply total U.S. demand, that would be correct," a second trader said. "However, there will be imports from China, Egypt, Brazil, Norway, Iceland, etc."
CC Metals & Alloys and Globe, whose 2012 ferrosilicon production figures were suppressed in the publicly available version of the trade petition, declined to comment on the claims.
About 112,400 tonnes of ferrosilicon were imported from Russia last year and 28,100 tonnes of ferrosilicon arrived from Venezuela, according to the U.S. Commerce Department.
Meanwhile, the first source said that participating in long-term supply contracts would "be the big problem" for companies targeted by the trade investigation, although he noted there are alternative markets into which material may be redirected.
He also expressed frustration that the original petition did not include ferrosilicon imported from China, noting that duties are placed on such material in the European market.
Spot ferrosilicon prices were unchanged Sept. 5 in a range of 94 to 96 cents per pound.