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Ferroalloys sellers hope to end deep discounts in 2014

Keywords: Tags  ferroalloys prices, ferroalloys discounts, ferroalloys contracts, flat-rolled, manganese alloys, ferrovanadium, noble alloys, Thorsten Schier

NEW YORK — Ferroalloys contract talks are set to kick off in mid-November, and so far market participants are unsure what form agreements might take for next year.

Sellers are hoping for a reduction in discounts off benchmark numbers or a move to fixed pricing.

"Contracts for next year are still a big question mark right now," one ferrosilicon supplier said.

With the formula-based discounts off benchmark prices entered into for 2013, producers have in some cases been discounting off prices that were already "loss-making," the supplier said.

"We’re done with the deep discounts. You’re going to have to see prices going up across the board. It’s just because everybody is losing money," one manganese alloy supplier said.

A ferrovanadium source said that contracts completed early were made at significantly lower discounts to benchmark numbers, as that market is expected to be tight in 2014.

Some sources hoped that the recent controversy around discounting off benchmark numbers in the flat-rolled steel market would filter through to alloys (, April 17).

"It’s hard for the mills to argue for formula-based discounts (on the buying side) when at the same time they are trying to get away from them on the sales side," a second manganese alloy supplier said.

The market is generally expected to gradually improve next year, although no large jumps in demand are seen.

"It’s probably going to be a little bit better than this year," one noble alloys trader said.

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