Ferrochrome

摘要

Following last month's contract negotiations, the South African charge chrome producers have settled third quarter contract volumes with European stainless mills, accepting a decline of around 5 cents/lb compared with the second quarter price of 78 cents/lb. The decline in contract prices is the first experienced in this market in more than three years. For the most part it can be attributed to the depreciation in the rand over the last month, as well as the weak outlook for the stainless steel market, which has contributed to cutbacks in melted output. Spot market activity in the region, which is usually reduced during the third quarter has now come to a standstill, with anecdotal reports suggesting that the last spot sales were conducted more than two to three weeks ago at levels of around 740/lb on a delivered to customer basis. This represents a fall of 40/lb compared with May's average price. In the USA and Japan spot market prices have also deteriorated compared with May levels, falling by around 1-2 cents/lb for high carbon ferrochrome material. Given the cutbacks to stainless melted output now in place in Europe and Asia, market participants in all regions are not optimistic of any real improvement in spot activity over the coming months. Indeed, we expect that spot prices will continue to slide over the third quarter, in line with softer demand for ferrochrome and discounted sales from producers more dependent on spot market revenue.