U.S. ferrochrome prices have been slipping by about 1¢/lb weekly as spot buyers stay away from the market, and traders see little chance of a recovery as long as steelmakers are operating below 50% of capacity. The Platts Metals Week subscription newsletter says traders are reporting that ferroalloys prices, as a group, are being offered well below production costs in China, the main supplier to the U.S.
High-carbon charge chrome averaged 77¢/lb at the end of February but that has slipped to 76¢ last week and 75¢ this week. At the end of the third quarter of 2008, this product cost $1/lb. A ferroalloys buyer at a steel mill tells the American Metals Market subscription newsletter that “market prices are going to trend down, not up, in the foreseeable future.” He also suggests that if he had to take the over or the under on the 75¢ price, he’d take the under.
That meshes with comments from traders, who say they haven’t been importing much, if any, material from foreign producer furnaces this year. That’s because users aren’t buying much these days because they still are working down inventories bought last year of ferrochrome, ferrosilicon, silicomanganese and other bulk alloys used in steelmaking and aluminum smelting. One buyer reports he hasn’t bought ferrochrome in about five months and is still whittling down its stockpiles, adding that he paid well above current market prices for the stock on hand.
Meanwhile, Eramet North America soon will indefinitely shut its special products division, including ferrochrome operations, in Marietta, Ohio, until business improves. The company also will take its silicomanganese furnace offline for 60 days in mid-March and idle one of two ferromanganese furnaces for 90 days in May.
Source: Purchasing.com
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