The European ferro-silicon spot market stabilised in August, cementing support on current prices despite brittle consumption trends. Prices are vulnerable to further losses, however, given weakening European economies. European ferro-sili-con spot market prices are at ?1,120-1,140/ tonne delivered. Most European steel mills are only getting back to production after the seasonal slowdown. We understand steelmakers have sufficient raw materials to last through the current quarter. The return of buying interest is expected in September for the fourth quarter. The European steel sector, however, looks depressed through December, so any uptick in fourth-quarter purchasing is likely to be modest. The Chinese market has been muted for several weeks now after steelmakers' purchases in June for the third quarter, prompting some smaller producers to cut their prices recently in the hope of attracting buying interest. Some producers are offering as low as RMB5,750/ tonne ex-works paid by acceptance bills, although no deals have been completed at that level. We expect current conditions to persist in the near term as demand looks slow among downstream industries.
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