Ferrochrome

摘要

With the end of the fourth quarter in sight, negotiations for first quarter contract prices have commenced. As a result of the rand appreciating by a further 10 percent in November alone, South African producers are now pushing for a first quarter price increment of at least 7 cents/lb, which is required for these producers to recoup some of their rapidly rising production costs. The appreciation of the rand clearly accounts for the majority of the expected price hike. However, as we indicated in last month's edition of the Nickel Chrome Molybdenum Monitor, rising freight costs are also hindering South African producers, as delivery costs have increased by around 1-2 cents/lb. As a result, several South African producers are hopeful of achieving price rises of over 9 cents/lb. However, anecdotal evidence suggests that this price level may be difficult to obtain. In the USA and in Asia, some contract volumes for next quarter have already been reported as being settled, with increases of 7 cents/lb in both regions. While these increases are not as yet official, and there has been no confirmation of the European first quarter contract price, an increment of this magnitude will take final contract prices up to over 56 cents/lb in Q1 2004 in Europe and the USA, which has not been achieved in either of these markets since early 1996.