Chinese government adds Mn, Cr, W ,SB,IN and so on to strategical stockpiles

The Central Government of China announced on the 7th of January to accelerate the Whole Country Mineral Resources Plan (2008 – 2015). In addition to such tightened mineral materials as oil and so on, several items will be supplemented for strategical stockpiles.

According to this plan, in addition to oil and special grade coal, such important mineral resources as coal, copper, chrome, manganese, tungsten, rare earths, and so on, supplies of which have tightened, are supplemented for strategical stockpiles. At the same time, the Government will complete the mechanism to control and operate the stockpiles, in order to connect important mineral materials with its resources, and promote the scheme for strategical stockpiles through rational allotments by enterprises.

This plan for strategical stockpiles to be promoted in China is to set up a similar organization to that, which Japanese Government has already organized in cooperation between officials and people to stockpile important mineral materials and to operate them, and it is thought that Chinese Government has also aimed to stockpile strategical mineral materials as mentioned above and to operate them. – TEX Report

General review of manganese ferro-alloys in 2008 and its outlook for new year

Major Steel Companies Plan To Construct Plants For Ferro-Alloys, Being Stimulated By Steeply Risen Alloys Prices

When price of manganese ore is boiled down, the ultimate matter comes to movements of prices for manganese ferro-alloys. Many companies have been producing manganese ferro-alloys, having caused to repeat excessive competition, and this structure for supplies of manganese ferro-alloys has suggested a possibility to occur a disturbance in the future, since many projects had stood together in large numbers in 2008.

So far major manganese mines have possessed their own plants for ferro-alloys and benefitted from 20 – 30% of their turnover and, being stimulated by a fever of the so-called boomed resources materials arisen in 2008, these manganese mines have taken an attitude to strengthen their own plants for production of manganese ferro-alloys. Namely, Assmang, Eramet , BHP Billiton, and so on have planned to construct new plants or new electric furnaces. This fever has been backed up by an existence of major steel companies.

Since the manganese project in Sishen district of South Africa has been promoted, such major steel companies as ArcelorMittal and Posco have participated in this manganese project and, in addition, ArcelorMittal has planned to construct a new plant for ferro-alloys in Coega industrial zone of South Africa. It was also informed that Posco will also launch to produce manganese ferro-alloys.

However, owing to the raging waves to reduce steel production from October of 2008 caused by a crisis of monetary markets, the guarantee to fulfill these projects as mentioned above on scale and within period is now being shaken. It was informed that some of these projects have been already postponed or withdrawn.

A key to grasp production of manganese ferro-alloys is the movements of prices for manganese ferro-alloys in China. A trigger to induce steel companies to construct their own plants as mentioned above is the steeply risen prices of manganese ferro-alloys produced in China. The market prices of Chinese manganese ferro-alloys in 2008 had shown a high volatility.

The highest price of Chinese silico-manganese for export in 2008 was US$2,500 per metric ton CIF Japan as recorded in June. On the other hand, the lowest price of Chinese silico-manganese for export recorded on the end December of 2008 was US$1,350 CIF as fallen by nearly half of the highest one and this considerable fluctuation of price for Chinese silico-manganese in 2008 gave a reality of market prices for Chinese manganese ferro-alloys moved in 2008. The situation of " flowers falling in the wind after cherry blossom viewing " has been carried over by an aftereffect of excessive stocks.

China exported 3.03 million tons of ferro-alloys in 2008, including 1.10 million tons of manganese ferro-alloys. China exported ferro-alloys to 65 countries in the world and, therefore, China's influence on market prices of ferro-alloys is not negligible, because prices of ferro-alloys exported from China have been considered as an influential index in the international market. The Central Government of China has enforced from the 1st January of 2009 the regulations for exports of ferro-alloys from China, having adopted the system to qualify exporters and to issue export licenses to these qualified exporters, but avoided to put practice in the measure to strengthen further the regulations for exports of ferro-alloys (transaction between qualified producers and qualified traders on back-to-back basis), because advantages and disadvantages have been confused and a strong opposition to this case has existed.

The production of crude steel in China turned to decrease from September of 2008 and the output in the calendar year (January – December) of 2008 came to 502 million tons, having had a small increase of 1.7% from that in the preceding year of 2007. For a reference, China produced 17.05 million tons of ferro-alloys in January – November of 2008, having increased by 5.8% compared with that in the same period of 2007, but the production of ferro-alloys in China at last turned to decrease from October of 2008, because China has inclined to reduce their steel production from September.

The Central Government of China announced in November of 2008 a guideline for rearrangement of composition in enterprises to produce ferro-alloys and has decided the policy to regulate the facilities to produce 20 million tons per annum of ferro-alloys with a target to finish it by 2010. This has aimed to reduce the facilities by 24% compared with those in 2005. In line with the countermeasures for environmental pollution and energy saving, Chinese Government has intended to regulate production and exports of ferro-alloys.

Manganese ferro-alloys and ferro-silicon have shared a majority of ferro-alloys produced in China and, in order to produce manganese ferro-alloys, Chin has to import a majority of manganese ore to be used as raw material for its production. Accordingly, China has the constitution to react sensitively to a tide of prices for resources materials, which China has to import from overseas countries.

Australia, South Africa, Gabon and Brazil are four major countries to supply manganese ore to China and, therefore, have held a strong power to influence on the imports by China, having caused an instability of price for manganese ore.

2008 was the year, having shaken the supply of manganese ore for China by the oligopoly from four major producing countries of manganese ore. China imported 7.58 million tons of manganese ore in 2008 (compared to 6.64 million tons in 2007), including 5.98 million tons (shared 79%) supplied by four major countries as mentioned above. Under this constitution, price of manganese ore imported by China in 2008 had risen steeply. The price of medium grade manganese ore with Mn 45%, as a typical quality for China, had risen from US$11 per Mn 1% CIF China at the beginning of 2008 to US$16.30 CIF.

When price of manganese ore imported by China had risen to a higher level than US$16 per Mn 1% CIF, the cost to produce manganese ferro-alloys in China turned to be not payable, having become a loss. By reason of the steeply risen price for manganese ore as raw material, price of Chinese silico-manganese had once risen to a level of US$2,500 per metric ton CIF Japan but it was not possible to maintain this higher price for a long period. On the contrary, owing to oversupply of Chinese silico-manganese, its price turned to fall and, when price of Chinese silico-manganese had fallen to a lower level than US$1,800 – 2,000 CIF, the production of silico-manganese in China had shown a loss.

The jinx, which, after Olympic Games were over, a recession of economy arises as a reaction to this event, had appeared in Japan and South Korea in the past years and this case is also thought to have been applied to the Beijing Olympic Games. In order to enhance national glory, China successfully held the Beijing Olympic Games in August of 2008 but, in consequence of accumulated stocks of materials purchased in advance of the Beijing Olympic Games, new businesses were depressed to a considerable extent from autumn of 2008. In anticipation of traffic congestion supposed to emerge from this event, many countries of the world, including domestic market of China, procured in advance materials from China and, after the Beijing Olympic Games were over, huge stocks of materials have been left.

Consumers have held enough stocks of ferro-alloys, which are durable for 2 – 3 months at least without purchases from China, and the ferro-alloy industry of Japan has been placed on the same situation with excessive stocks of ferro-alloys. This aftereffect was unable to be resolved even in December of 2008 and has been carried over to January – March quarter of 2009. Incidentally, owing to a crisis of monetary market emerged on the worldwide scale from October of 2008, raging waves to strengthen cash flow have pursued curtailment of stocks and cutback of new purchases. (Tue 10Feb,2009) – TEX Report

Chinese steel mills restart purchase of ferromanganese

It is reported that current domestic FeMn market runs steady as steel mills start to restock.

High Carbon Ferro Manganese tends upward with mainstream price at CNY 8300 per tonne to CNY 8500 per tonne. Guangxi Bayi Steel firstly raised purchase price by CNY 200 per tonne to CNY 8700 per tonne ex factory for HCFeMn.

Export prices of HCFeMn stand at USD 1500 per tonne FOB and USD 1700 per tonne FOB respectively. Medium Carbon Ferro Manganese is quoted in disorder now as most makers are still suspending production makes slim spot goods available in the market. MCFeMn 78C2.0 price is at CNY 10,500 per tonne to CNY 12,500 per tonne and 78C1.5 at CNY 11,500 per tonne to CNY 13,500 per tonne but the real executive price of 78C2.0 which is slight higher price in the north is said at around CNY 11,000 per tonne.

Low Carbon Ferromanganese generally stays at CNY 14,000 per tonne and almost no spot goods are available now. – MySteel.net

Ukraine cuts ferroalloy output 79% in Jan

Ukraine reduced ferroalloy production 79% year-on-year on average in January, the Ukrainian Ferroalloy Producers' Association said Friday.

Nikopol Ferroalloy Works (NFW), the biggest of Ukraine's three ferroalloy smelters, reduced output 79.1% to 18,300 tonnes of ferroalloys. Silicon manganese production fell 69.8% to 18,100 tonnes and ferromanganese production was just 200 tonnes, compared with 27,700 tonnes in January 2007.

Zaporizhiya Ferroalloy Works (ZFW) cut production 78% to 9,300 tonnes of ferroalloys: 45%-ferrosilicon was down 51.5% to 3,200 tonnes, silicon manganese fell 89.5% to 2,600 tonnes and ferromanganese fell 73.8% to 2,700 tonnes, however manganese metal production rose 60% to 800 tonnes.

Stakhanov Ferroalloy Works (SFW) slashed output 78.9% to 4,500 tonnes of ferroalloys, including 4,500 tonnes of 45%-ferrosilicon, down 58.7% year-on-year, but no silicon manganese.

The country's two manganese concentrate producers, the Ordzhonikidze and Marhanets mining and beneficiation plants, did not produce anything in January because demand was low and they still had inventory to clear. – Interfax

Antimony ingot prices still rising

BEIJING (Asian Metal) 11 Feb 09 – Despite that consumers are reluctant to accept the increasing price, producers continue to lift their offers for antimony ingot in the name of tight supply. Some producers have started to quote RMB30,000-31,000/t ex works for the material, market sources reported to Asian Metal.
A Hunan-based antimony ingot producer just resumed production but has not started to offer. "We received several inquiries last week. Some buyers bid RMB28,000/t ex works early last week and RMB29,000/t ex works at the end of last week, but we did not sell the material as we think the price is likely to rise further," said the source.
The source said that the supply is tight as most smelters have just resumed production without much material to put into the market. Additionally, some consumers who did not make purchase before the Spring Festival may be anxious for raw material in order to maintain production. Therefore, the source predicts that the market will continue its upward trend in the following two weeks.
With a capacity of 300tpm, the smelter holds a certain quantity of antimony ingot in stock. The source revealed that their previous deal was concluded at around RMB26,000/t ex works in late January.
An antimony trioxide producer, with a capacity of 2,000tpy, confirmed that the antimony ingot price is still hiking. "We received a few inquiries for antimony trioxide, but we have not taken those orders as we failed to replenish the stock of antimony ingot," said the source.
The source revealed that some producers increased their offers of antimony ingot to RMB31,000/t ex works early this week, up from RMB28,000-29,000/t ex works a week ago. As buyers resist the price increase of antimony trioxide, antimony trioxide producers are put into dilemma.
The source also believes that the antimony ingot market will continue to rise in rest of this month, but it may calm down in early March when more material is found in the market.

Antimony producers expect higher price

BEIJING (Asian Metal) 2 Feb 09 – Most Chinese antimony ingot producers are not back from the Spring Festival holiday. They expect higher prices for antimony ingot in the following two or three weeks as the market supply seems comparatively tight.
An official from a Hunan-based antimony ingot smelter anticipates that the price of the material might rise to RMB30,000/t (USD4,380/t) ex works before long due to tight availability. "We received a few inquiries before and during the holiday, but we would not like to sell because we predicted the price would go higher," said the source.
According to the source, the smelter, with a capacity of 2,000tpy, stopped production in the second half of last month and planned to resume production after the Lantern Festival. "We have a stock of 200-300t on hand, but we're not going to sell at the moment," said the source, adding that the most recent deal was concluded at around RMB25,500/t (USD3,723/t) ex works VAT excluded late last month.
Another Hunan-based antimony ingot producer also takes a high expectation on the future market. "The antimony market is chaotic now. Producers are talking the price up in the name of tight supply," said the source. According to the source, antimony ingot 99.65%min is being offered in a wide range of RMB26,500-28,000/t (USD3,869-4,088/t) ex works, and some producers quote as high as RMB27,500/t ex works VAT excluded. However, there are few deals concluded for the time being. On the one hand, most producers have not returned to the market; on the other hand, consumers are not ready to accept the high price at RMB27,000-28,000/t (USD3,942-4,088/t) ex works.
"Nevertheless, we have confidence in concluding deals at higher prices given that not only antimony ingot is in tight supply, but antimony concentrate, the raw material is also very hard to obtain," said the source.
The source also expects the antimony ingot price to breach RMB30,000/t (USD4,380/t) ex works before long, but it is too early to predict the market in March and April.
With a capacity of 200tpm, the smelter is also out of production and plans not restart until the Lantern Festival.