Silicomanganese suppliers are chasing a reduction in discounts
for 2014 contracts, although ongoing uncertainty over Felman
Production LLCs petition for a special electricity rate
for its plant in New Haven, W.Va., may see some consumers lean
more heavily on the spot market next year.
AMM that contract talks are unlikely to be concluded
before Thanksgiving, adding that they are pushing for smaller
discounts off independently assessed prices than those
incorporated in 2013 contracts.
prices were in a range of 51 to 53 cents per pound Nov. 21.
"There is a sense that
discounts have gotten out of hand, and even some consumers know
that the producers cannot survive with these discounts," one
supplier said. "Whatever the discount level was last year, the
supply industry is looking for about half of that."
"If suppliers are
smart, they wont screw too much with the discount levels,
because consumers have to feel like theyre getting
something," a second supplier added. "I think initial quotes
will be close to flat or a 1-percent discount, and then
incumbent suppliers will get a last look. Personally, I think
51 and 52 cents per pound are already discounted levels for
However, the push for
smaller discounts, coupled with uncertainty over supply due to
Felmans current lack of production, may be encouraging
consumers to delay a decision over long-term contracts well
Felman has petitioned the West Virginia Public Service
Commission for a special electricity rate (amm.com,
Sept. 3), with evidentiary hearings for the request scheduled
for December (amm.com, Nov. 13).
"Some consumers are
looking at the offers theyre getting and are probably not
too excited about discounts theyre seeing, and if Felman
restarts it will change the equation," a third supplier
"If (suppliers) are setting discounts of about 1 to 2
percent, the consumers may think, Ill take my
chances in the spot market."