wfm 1115

Key prices in Europe

World Bulk Ferro-alloys Markets

Contents

Price forecast in key global markets

Metal ExpertIssue 11 (43)

the price trend may only reverse in H2 next year

Monthly report

Region Alloy’s gradeTerm of delivery

Aug 15 Sep 15 Oct 15 Nov 15 Dec 15* Jan 16* Feb 16*

India SiMn (65% Mn; 16% Si; 2% C max; 0,2-0,3% P)

$/t, fob 807 760 750 703 675 640 640

Europe SiMn (65% Mn; 17% Si; 2% C max; 0,17% P)

EUR/t, ddp 811 765 690 642 615 600 600

China FeSi (75% Si) $/t, fob 1210 1165 1140 1130 1115 1125 1125

Europe HC FeCr (60-65% Cr; 6-8% C) $/lb Cr, ddp 0,94 0,87 0,88 0,83 0,81 0,81 0,83

*-forecastSource:MetalExpert

0,820,850,880,910,940,971,001,031,061,091,12

550

650

750

850

950

1050

1150

1250

1350

Jan

15

Mar

15

May

15

Jul 1

5

Sep

15

Nov

15

USD

/lb C

r, dd

p

EUR

/t, d

dp

SiMn (65% Mn; 17% Si)FeSi (75% Si)HC FeCr (60-65% Cr)

November, 2015

Actual topic 2Prices 4

ManganeseGlobal market for Mn ore 6European SiMn market 10European FeMn market 14US Mn alloys markets 17Turkish Mn alloys markets 20Indian Mn alloys markets 22Asian Mn alloys market 25

Silicon European FeSi market 30US, Turkish & Japanese FeSi market 33

Chrome European FeCr market 35European & US FeCr market 38Japanese FeCr market 40

NOTICE! At the moment of publication, Metal Expert learnt about the completion of investigation of the EEC into SiMn shipments from Ukraine to Russia. As a result of it, the regulator recommended the countries of the EEU, namely Russia, Kazakhstan, and Belarus, impose a 26.35% antidumping duty against Ukrainian material. This may cause notable changes in manganese alloy sales in both the domestic and global markets. Metal Expert’s estimation will be published as a separate research.

http://metalexpert-group.com/

World Bulk Ferro-alloys Markets November, 2015

© Metal Expert

2

Actual topic

Ferroalloy prices set to bottom out

Ferroalloy prices have kept decreasing in the global market this month. Man-ganese alloy prices have lost 5% in India, 8% in Europe and the USA, and 4% in Turkey and Asia. Silicon alloys have got some 3% cheaper all over the world and chrome alloys – 4% cheaper.

The decreasing trend is explained by sluggish demand and oversupply.

According to the WSA, carbon steel production dropped by 3% year-on-year in October. Chinese output declined by 2.2% and is now falling at a faster pace. Lower supply should have resulted in the margin recovery, but the oversupply kept pushing finished steel prices down. Specifically, prices for Chinese HRC lost $14/t reaching $256-266/t ex-warehouse VAT excluded and export quota-tions – $260-270/t FOB including taxes. No price recovery is possible right now in light of excessive supply coupled with lowering consumption in the Chinese domestic market. In order to maintain capacity utilization, the Chinese keep en-larging exports, offering the material at very low prices. The majority of Chinese steelmakers keep working at a loss in both the domestic and export markets. In order to prevent further losses, they tried to push long prices up last month, but in vain. The only to recover the margin is to reduce raw material prices, but it will not result in a margin recover as raw materials are already very cheap.

The markets for metallurgical raw materials (excluding ferroalloys) and finished steel seem to have reached the price bottom already. In December, a slight decrease is likely to take place, but in general Chinese, Asian, European, and Turkish steelmakers have been working at a loss for quite a long time, except for some US companies. Whereas in early 2014 the price dynamics in the global ferroalloy market was in accordance with the metallurgical price trend, since May 2015 the decreasing price trend has slowed down because of the temporal stabilization in manganese ore quotations and some speculations. In H2, global prices for steel products, billets and scrap have lost some 30%, whereas those for SiMn – only 16%. In September-October, manganese ore prices slipped and the quotes for December are already voiced below the level of production expenses. Thus, ferroalloy prices will inevitably go down, following the decrease in steel product markets in August-October. Ferroalloy markets will only stabilize in February, whereas the price trend may only reverse in H2 next year.


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3

Mn

Ferroalloy prices seem to have room for decrease further, $ per tonne

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0

200

400

600

800

1000

1200

100

200

300

400

500

600

Jan 14 May 14 Sep 14 Jan 15 May 15 Sep 15

HRC Steel scrap billet SiMn, R


© Metal Expert

4

Mn

Region/alloyTerm

of deliveryJun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15

SILICOMANGANESEEurope, contract prices, 65% Mn; 17% Si; 0,17% P EUR/t, ddp 800 800 800 770 770 770

Europe, spot prices, 65% Mn; 17% Si; 0,17% P EUR/t, ddp 814 812 811 765 690 642

North, spot prices, 65% Mn; 17% Si; 0,17% P EUR/t, ddp 812 812 810 762 688 640

South, spot prices, 65% Mn; 16% Si; 0,2-0,3% P EUR/t, ddp 808 789 788 767 687 621

East, spot prices, 65% Mn; 17% Si; 0,17% P EUR/t, ddp 816 808 814 775 695 647

USA, 65% Mn; 17% Si $/t, ddp 1155 1095 1075 985 937 860

China, 65% Mn; 17% Si $/t, exw 868 848 790 740 715 675

China, 65% Mn; 17% Si $/t, fob 1520 1520 1520 1520 1520 1520

India, 65% Mn; 16% Si $/t, fob 820 821 807 760 750 703

South Korea, 65% Mn; 16% Si $/t, fob - - - - - -

Turkey, 70% Mn; 17% Si from Ukraine

$/t, cif 905 905 890 860 814 785

Turkey, 70% Mn; 17% Si from Georgia

$/t, cif 1025 1025 1010 1005 950 -

Turkey, 65% Mn; 16% Si from India $/t, cif 847 850 845 810 760 725

Turkey, 60% Mn; 14% Si from India $/t, cif 775 775 767 745 700 680

Japan, 65% Mn; 16% Si $/t, cif 835 835 825 770 760 720

HC FERROMANGANESEEurope, contract prices, 78% Mn EUR/t, ddp 770 770 770 745 745 745

Europe, spot prices, 78% Mn EUR/t, ddp 770 760 776 745 700 659

USA, 78% Mn $/t, ddp 935 900 850 835 825 810

China, 75% Mn $/t, exw 907 873 800 770 725 632

China, 75% Mn $/t, fob 1500 1500 1500 1500 1500 1500

India, 75% Mn $/t, fob 783 770 750 720 700 670

South Korea, 75% Mn $/t, fob 800 785 740 710 660 640

Japan, 75% Mn $/t, cif 799 795 765 730 718 660

PricesPrices

Dynamics of bulk ferro-alloys prices in world markets


© Metal Expert

5

Note:monthlyaveragespotpricesunlessothermentioned;contractpriceseffectivefordeliveryperiodofoverthreemonths,spotones–forshipmentswithin1monthSource:MetalExpert

Region/alloyTerm

of deliveryJun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15

MC FERROMANGANESEEurope, contract prices, 82% Mn EUR/t, ddp 1190 1190 1190 1135 1135 1135

Europe, spot prices, 82% Mn EUR/t, ddp 1185 1185 1185 1135 1060 1040

FERROSILICONEurope, contract prices, 75% Si EUR/t, ddp 1225 1225 1225 1170 1170 1170

Europe, spot prices, 75% Si EUR/t, ddp 1225 1205 1185 1170 1070 975

China, 75% Si $/t, fob 1210 1210 1210 1165 1140 1130

USA, 75% Si $/t, ddp 1390 1380 1370 1330 1275 1150

Turkey, 75% Si from China $/t, cif 1260 1260 1245 1212 1080 1065

Turkey, 75% Si from Vietnam $/t, cif 1132 1143 1125 1078 1015 965



Turkey, 75% Si from Russia $/t, cif 1187 1190 1125 1113 1055 1005

Turkey, 65% Si from Russia $/t, cif 1060 1060 1030 1010 930 905

Turkey, 65% Si from Ukraine $/t, cif 1085 1085 1085 1085 985 985

Turkey, 70% Si from India $/t, cif 1120 1135 1175 1138 1110 1090

FERROCHROMEEurope, Charge chrome $/lb Cr 1,08 1,08 1,08 1,08 1,04 1,04

Europe, HC, 60-65% Cr, 6-8% C $/lb Cr, ddp 0,95 0,94 0,94 0,87 0,88 0,83

Europe, LC, 68-70% Cr; 0.10% C $/lb Cr, ddp 2,01 2,00 1,99 1,98 1,96 1,90

Japan, Charge chrome $/lb Cr 1,16 1,16 1,16 1,16 1,12 1,12

Japan, LС, 65% Cr, 0.10% C $/lb Cr, ddp 2,00 1,98 1,97 1,97 1,95 1,90

India, HC, 60% Cr, 6-8% C $/lb Cr, fob 0,82 0,80 0,79 0,74 0,72 0,70

USA, HC, 60-65% Cr, 6-8% C $/lb Cr, ddp 1,08 1,08 1,08 1,05 1,03 0,98

USA, LC, 0.10% C $/lb Cr, ddp 2,06 2,06 2,06 2,06 2,05 2,01

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© Metal Expert

6

Mn

Price forecast for manganese ore (46% Mn) CIF China

Price forecast for manganese ore (38% Mn) CIF China

3,20

3,20

3,20

3,10

2,70

2,70

*

2,60

2,60

2,60

2,00

2,50

3,00

3,50

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

Mar

16

USD

/dm

tu

2,70

2,65

2,65

2,65

2,50

*

2,40

*

2,40

2,40

2,40

1,50

2,00

2,50

3,00

3,50

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

Mar

16

USD

/dm

tu

Global market for Mn ore

Manganese

Prices for December shipments of manganese ore have not been announced at the time of publication of this report. South32 cut November prices for the material (45.5% Mn) to $2.7/dmtu, down $0.4/dmtu from October, and those for the material (48% Mn) to $2.5/dmtu. Eramet has reduced quotations of the material (44% Mn) by $2.4/dmtu. According to Metal Expert’s data, the material (38% Mn) is not shipped to China right now. All prices are CIF China.

Last month, steel output rose by 2% quarter-on-quarter, losing 3% year-on-year though. In 10 months, the decrease was 2.5% y-o-y against 2.4% y-o-y in 9 months. Chinese output declined by 2.2% to 672.8 million t in 10 months. Global output (excluding China) came down by 2.8% to 670.8 million t. Steel production is believed to keep decreasing together with manganese demand.

According to preliminary data, global manganese ore sales dropped by 5% year-on-year to 19.6 million t throughout January-September. Imports to China dropped by 5% to 11.8 million t and those to India – by 34% to 1.7 million t. The countries that have vertically integrated producers raised imports. Ukraine raised shipments from abroad by 47% to 1 million t, Norway – by 4% to 900,000 tpy, and France – by more than 2 times to 400,000 t. Nonetheless, these upturns are only just for in-house shipments and have no impact on the global free market. Imports to South Korea and Japan rose by a total of 6% to 1.9 million t.

*-MetalExpert’sestimate


© Metal Expert

7

Mn

Comparison of global Mn ore trade and steel ouput

1.5

1.7

1.9

2.1

2.3

2.5

2.7

2.9

May

14

Jun

14

Jul 1

4A

ug 1

4

Sep

14

Oct

14

Nov

14

Dec

14

Jan

15Fe

b 15

Mar

15

Apr

15

May

15

Jun

15Ju

l 15

Aug

15

Sep

15

125

127

129

131

133

135

137

139

141

143

145Mn ore world trade World steel production, R'0

00 t

'000

t

Global manganese ore sales will keep decreasing because steel production is supposed to keep declining. Over the whole year, sales will reach 26 million t against 27 million t in 2014.

Low profitability will result in production optimization by the biggest companies, and some facilities will be stopped. This month, South32 has closed Mamatwan mine, having plans on bringing it back on stream in Janu-ary. However, production at the company’s assets will drop by no more than 1.5% to 8.5 million t this year. Eramet raised output by 12% year-on-year and 8% quarter-on-quarter to 1.07 million t in Q3. Vale’s output was unchanged in annual compassion, adding 18% q-o-q though.

China’s port stocks have almost stopped decreasing. In November, it reached 2.87 million t, down 0.2% m-o-m, which is comparable to 2-month imports. The stocks have been minimal since February 2014. Demand continues to fall. Production of SiMn reached 373,000 t in October, down 8.8% m-o-m, and that of FeMn – 116,000 t, down 15.7%.


© Metal Expert

8

Mn

China’s port stocks of Mn ore get stabilized

2,02,22,42,62,83,03,23,43,63,84,0

2,02,53,03,54,04,55,05,56,06,57,0

Apr 1

1

Sep

11

Feb

12

Jul 1

2

Dec

12

May

13

Oct

13

Mar

14

Aug

14

Jan

15

Jun

15

Nov

15

mt

USD

/dm

tu

Mn ore stockpiles in portsprice for Mn ore (48% Mn)

Taking into account Metal Expert’s calculation of the cost of mining for the biggest producers, it is obvious that the companies with low inputs enlarge manufacture and the others, on the contrary, reduce it. Thus, the most effective producers are trying to raise their market share and force the rivals from the business. The average input cost of the ore (46% Mn), including transportation to Chinese ports, will be $2.26.dmtu this year.

Manganese ore demand will keep slackening over the period under review. In January, it will reach its 3-year lowest because of the decrease in global steel output, so prices will most likely come down.

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© Metal Expert

9

Mn

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Note:in‘000tonnes

Note:$/mtuSource:MetalExpert

Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15South32 (BHP Billiton)

Australia 1307 1182 1256 1019 1319 1210 1289 1136 1268Africa 939 864 944 782 936 1049 1007 913 820

Assore/ARM (Assmang)Africa 858 864 864 816 816 744 744 810 780

ENRCKazakhstan 1111 1241 942 759 1058 982 888 452 595

Eramet ComilogGabon 908 969 966 796 849 961 846 880 997

ValeBrazil 617 621 638 470 505 654 723 592 554

PrivatUkraine 326 294 198 183 282 387 390 145 362

MOILIndia 252 231 312 340 273 241 308 317 276

Ghana Manganese Company Ghana 445 484 458 454 455 436 160 310 396

Consolidated MineralsAustralia 418 407 401 406 416 436 443 404 371

OM HoldingsAustralia 208 151 272 222 225 251 192 158 191Africa 166 226 264 394 535 538 543 474 509

Mineracao Buritirama, MarabaBrazil 63 63 63 63 63 63 63 63 63

Renova (Kalahari Desert)Africa 675 675 675 675 675 675 675 675 675

Dynamics of Mn ore prices in world markets

Global manganese ore production

Term

of deliveryMay 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15

Import to China (Australia, 48% Mn) CIF 3,03 3,03 3,03 3,00 3,00 3,00 2,50

Import to China (Australia, 46% Mn) CIF 3,20 3,20 3,20 3,20 3,20 3,10 2,70

Import to China (South Africa, 38% Mn) CIF 2,70 2,70 2,70 2,65 2,65 2,65 -


© Metal Expert

10

Mn

European SiMn spot prices forecast

814

812

811

765

690

642

615

600

600

500

600

700

800

900

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

EUR

/t, d

dp

European SiMn market

Contrary to expectations, offers have not stabilized this month. The average weighted benchmark price for SiMn (65% Mn; 17% Si) has dropped from last month’s EUR 690/t DDP to EUR 642/t DDP on the back of low consumption, the collapse of manganese ore quotes, and the availability of stockpiles.

SiMn surplus persisted in the European market since May, when imports from India and Ukraine increased despite comparatively stable end use. Speculations over the possible imposition of an antidumping duty against Indian material in September started then, too. It seems like European traders hurried to restock on the alloy beforehand. Fearing that a duty on Ukrainian shipments in Russia may be imposed, Ukrainian merchants tried to partially redirect sales to Europe, although the strengthening of the hryvnia was against them. In May, Europe raised imports by 68,000 t, which is the 2-year maximum. By September, SiMn surplus reached 28,000 t (30% of the average monthly consumption). The market will become balanced in late 2015, Metal Expert believes. The material leftover will not exceed 5,000-10,000 t.


© Metal Expert

11

Mn

European SiMn market balance

-60

-40

-20

0

20

40

60

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15*

Q4

15*

Q1

16*

'000

tonn

es

Source: Metal Expert*- forecast

SiMn shipments from abroad will come down. Imports reached a local mini-mum of 40,000 t back in September. Purchases were at this level last September, but this year steel output dropped by almost 4% (1 million t) year-on-year. Indian merchants have been working at a loss for quite a long time and they are unable to compete with Ukrainian and South African suppliers. Besides, the quality of Indian alloys is worse than that of the analogs. In H2, shipments from India to Europe reached 10,000-13,000 tpm against 18,000 tpm averagely in H1. The dynamics of shipments from Ukraine is the quite the same.

Ukraine and South Africa have been forcing India from the European SiMn market for the past 3 years. In 2013, India was the biggest importer of the alloy, covering 38% of all foreign shipments, whereas the shares of Ukraine and South Africa were 19% and 6% respectively. Last year, Indian companies lost 9 percentage points, securing 20% of European imports to themselves, whereas Ukrainian and South African merchants raised their shares to 27% and 17% respectively. By Metal Expert’s preliminary estimate, in 2015 Ukraine and India will come in par, securing 30% each, whereas South African share will approximate 16%. It will be easier for Ukrainian and South African companies to compete in the low market as they both have raw material sources of their own and their national currencies keep devaluating.


© Metal Expert

12

Mn

India lost its competitiveness in Europe (production costs comparison), $ per tonne

400

500

600

700

800

900

1000

1100

1200

1300

Jan 14 May 14 Sep 14 Jan 15 May 15 Sep 15

$/to

nne

Domestic priceIndia UkraineRSA

End user activity is unlikely to recover soon. Regional steel output will reach 169.5 million t in 2015 against 171.5 million t last year. In Q1, the output will hardly exceed 42 million t, which is 5-6% lower than in 2013-2014 and 3% lower than in the post-crisis first quarter of 2010. China is still the main reason behind the negative situation in the global steel market. By late November, export prices for Chinese HRC have reached $260-265/t FOB, $20/t below Ukrainian and Turkish billet quotations. Besides, it is respectively $100/t and $95/t lower than prices for European flats and longs. The Chinese keep working with negative profitability in both the domestic and foreign markets, which is making them lower production, but not exports. China’s steel manufacture dropped by 2.2% month-on-month in October, the NBS reports. However, this decrease in not enough, Metal Expert thinks.

It is still likely that European manganese alloy prices will keep decreas-ing. Stabilization is possible during the holidays in late December – early January, yet the price trend is not supposed to reverse until the end of Q1.

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13

Mn

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Source:MetalExpert*-forecast,**-preliminarydataNote:in‘000grosstonnes

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15** Q4 15* Q1 16*PRODUCTION 46 47 45 44 43 48 134 129

by companyFerroatlantica 10 10 10 10 10 10 31 30Glencore 9 9 9 8 8 8 27 27Eramet 23 23 23 24 24 24 71 70OFZ 4 5 3 2 1 5 5 2Skopski Leguri 0 0 0 0 0 0 0 0Feral 0 0 0 0 0 0 0 0Other 0 0 0 0 0 0 0 0

EXPORT 10 8 6 13 2 4 21 19

IMPORT 48 68 52 48 59 40 142 143by countriesCIS 14 23 16 10 10 10 - -India 22 18 16 13 20 10 - -China 0 0 0 0 0 0 - -Africa 3 7 8 18 17 4 - -South America 2 1 0 0 0 0 - -Middle East 0 0 0 0 0 0 - -Other countries 8 19 12 6 12 15 - -

APPARENT CONSUMPTION 85 107 91 79 100 83 255 253

STEEL PRODUCTION 14460 15552 14746 13810 12361 13761 40166 42131

ESTIMATED CONSUMPTION 89 96 91 85 76 85 248 260

BALANCE -5 11 0 -6 24 -2 7 -7

European silicomanganese market structure

European silicomanganese market [Mn content]

Source:MetalExpert*-forecast,**-preliminarydataNote:in‘000tonnes

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15** Q4 15* Q1 16*Production 30 31 30 29 28 31 87 84Export 6 5 4 8 2 3 14 12Import 32 45 35 31 39 26 93 94Apparent Consumption 56 71 60 52 66 55 167 166Estimated Consumption 59 63 60 56 50 56 163 171Balance -3 8 1 -4 16 -1 4 -4


© Metal Expert

14

MnEuropean FeMn market

European HC FeMn spot prices forecast

770

760 77

6

745

700

659

645

640

640

500

600

700

800

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

EUR

/t, d

dp

Manganese alloy prices have kept decreasing in Europe this month. The average weighted benchmark price for HC FeMn (75% Mn) has gone down from EUR 700/t DDP to EUR 659/t DDP on the back of low consumption and high competition.

Prices are going down, though there is no surplus. As of late October, the accumulated shortage has reached 10,000 t (25% of the average monthly consumption) because of the notable decrease in imports. Imports will stay low in winter, whereas consumption will most likely stabilize, the deficit will continue.

European HC FeMn market balance

-60

-40

-20

0

20

40

60

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15*

Q4

15*

Q1

16*

'000

tonn

es



© Metal Expert

15

Mn

The decrease in SiMn and FeSi prices will impact FeMn quotations. Over the year, the alloys have got 20% cheaper, whereas FeMn has dropped only by 8%. This month, the cost of the alternative blend of HC FeMn and FeSi has been EUR 150/t above that of SiMn (EUR 100/t over the year and EUR 65/t in Q1).

FeMn imports are unlikely to come up in the near future. At South Af-rica’s South32, three out of the four installed furnaces are still idle. Assmang’s equipment is out of operation, too. Besides, South32 has suspended mining at Mamatwan until January at least. The material from Wessels mine will most likely be exported and the ore to cover the company’s own needs will be limited.

FeMn production is unlikely to change in Europe. Production cutbacks mean an increase the fixed costs in the inputs, which is unacceptable for pro-ducers right now. Such a strategy is only useful when prices bottom out and the least effective suppliers are forced out from the market. Then, additional cutbacks may push prices up.

Next month, the price decrease, if any, will moderate in the European FeMn market. Prices will stabilize after Christmas holidays.

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16

Mn

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Source:MetalExpert.*-forecast,**-preliminarydata.Note:in‘000grosstonnes

European HC FeMn market structureApr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15** Q4 15* Q1 16*

PRODUCTION 26 25 27 28 29 24 77 76by companyGlencore 11 11 11 11 11 11 28 30Eramet 5 5 5 5 5 5 17 15Ferroatlantica 8 8 8 8 8 8 23 23OFZ 1 0 3 4 6 0 9 8Others 0 0 0 0 0 0 0 0

EXPORT 2 1 3 0 0 1 3 2

IMPORT 17 20 16 18 18 14 34 40by countriesCIS 3 2 3 4 4 6 - -India 0 0 0 1 3 3 - -China 0 0 0 0 0 0 - -Africa 13 17 12 13 10 5 - -South America 0 0 0 0 0 0 - -Other countries of the world 0 0 0 1 1 1 - -



ESTIMATED CONSUMPTION OF HC FEMN 44 47 45 42 37 42 122 128

BALANCE -3 -4 -4 4 9 -4 -14 -14

European MC&LC FeMn market structureApr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15** Q4 15* Q1 16*

PRODUCTION 24 24 24 24 24 24 67 68by companyEramet 21 21 21 21 21 21 59 60Ferroatlantica 3 3 3 3 3 3 8 8Others 0 0 0 0 0 0 0 0

EXPORT 1 1 2 1 1 1 4 4

IMPORT 4 12 4 3 4 2 14 12by countriesCIS 0 1 0 0 0 0 - -India 0 0 0 0 0 0 - -China 0 0 0 0 0 0 - -Africa 4 11 4 3 4 2 - -South America 0 0 0 0 0 0 - -Middle East 0 0 0 0 0 0 - -Other countries of the world 0 0 0 0 0 0 - -



ESTIMATED CONSUMPTION OF MC&LC FEMN 28 30 28 27 24 27 78 81

BALANCE -2 5 -3 -2 3 -2 -1 -5


© Metal Expert

17

MnUS Mn alloys markets

US SiMn spot prices forecast US HC FeMn spot prices forecast

1155

1095

1075

985

937

860

730

720

710

500

600

700

800

900

1000

1100

1200

1300

1400

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/t, d

dp

935

900

850

835

825

810

800

780

780

500

600

700

800

900

1000

1100

1200

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/t, d

dp

The US spot market for manganese alloys has been weak this month. SiMn (65% Mn; 17% Si) has been available at $0.39/lb ($860/t) DDP, down 8.2% month-on-month, and HC FeMn (75% Mn) – at $810/t DDP, down 1.7% from October.

The recession in the global steelmaking industry still has a bad influence on the ferroalloy market. By Metal Expert’s estimate, US carbon steel production will reach 79.79 million t in 2015, which is a 6-year minimum. The output is unlikely to increase in Q1, given that some local producers have stopped manu-facture until the market strengthens. In January-March, the output will drop by 3.4% quorter-on-qourter and 6.3% year-on-year to 18.62 million t.

SiMn is still oversupplied, although the decrease in supply has been 18.5% y-o-y over January-November and that in consumption – 9.3% y-o-y. By Metal Expert’s estimate, SiMn stocks will reach 15,000 t by late December (some 40% of the average monthly consumption), so the market balance will be hardly reachable during Q1.


© Metal Expert

18

Mn

US SiMn market balance

-50,0

-30,0

-10,0

10,0

30,0

50,0

Q2

14

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15

Q4

15*

Q1

16*

'000

tonn

es


Imports structure is likely to change in the near future. Next quarter, SiMn production is going to be launched at Malaysian plants Pertama Fer-roalloys, OM Sarawak, and Sakura Ferroalloys, which will possibly ship their material to the USA. By Metal Expert’s estimate, Malaysia will be putting out 10,000-15,000 tpm and 30,000-35,000 tpm by end-2016. From the other hand, imports from Australia will minimize in early 2016, whereas in November its share was 16.7%.

The price decrease may speed up in the near future. Given that the Novem-ber decrease in European quotations has been bigger than that in the USA, the premium value of the American market has increased by 10% month-on-month. The strengthening of the US dollar will result in lower inputs and higher competi-tion. The Georgian lari is unlikely to keep devaluating in the future, whereas the South African rand will keep getting weaker. In particular, since mid-May the lari has got a mere 2% against the dollar and rand – 20% cheaper.

SiMn prices will keep decreasing in the USA amid sluggish consumption and tough competition among foreign suppliers.

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19

Mn

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Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15* Q1 16*PRODUCTION 7 7 7 7 7 9 28 29

EXPORT 0,7 1,7 1,0 0,6 0,7 0,8 1,7 1,6

IMPORT 39 45 25 33 19 27 76 72by countriesGeorgia 14 14 0 16 2 17 13 22Africa 12 9 12 8 7 0 36 30Norway 2 2 5 2 3 0 1 1Other countries 11 20 9 7 8 10 26 19




BALANCE 11 14 -5 2 -11 0 0 0

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15* Q1 16*PRODUCTION 1 1 1 1 1 1 3 3

EXPORT 2,1 1,7 1,0 1,1 1,2 1,8 4,0 4,0

IMPORT 7 36 14 10 14 9 33 43by countriesAfrica 1 22 12 6 8 5 13 12Australia 5 0 1 0 7 0 3 9Norway 1 0 0 1 0 0 7 7Other countries 0 2 1 3 0 4 0 6




BALANCE -13 15 -6 -10 -6 -11 -24 -12

USA silicomanganese market structure

USA ferromanganese market structure


© Metal Expert

20

Mn

Note:in‘000tonnes*-MetalExpertestimation

Turkish Mn alloys markets

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15PRODUCTION* 0,0 0,0 0,0 0,0 0,0 0,0

EXPORT 0,0 0,0 0,2 0,3 0,1 0,0

IMPORT 25,0 15,5 22,3 20,4 9,5 13,5by suppliersUkraine 18,6 8,0 16,5 16,9 8,8 11,4India 5,3 6,0 4,7 3,0 0,5 1,6Georgia 0,1 0,5 0,1 0,4 0,2 0,5Norway 1,0 1,0 1,0 0,1 0,0 0,0Others 0,0 0,0 0,0 0,0 0,0 0,0

DOMESTIC MARKET 25,0 15,5 22,2 20,1 9,4 13,4

STEEL PRODUCTION 2775 2919 2844 2539 2563 2489

ESTIMATED CONSUMPTION 21,5 22,6 22,0 19,7 19,9 19,3

BALANCE 3,5 -7,1 0,2 0,4 -10,4 -5,8

Turkish SiMn market structure

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21

Mn

Turkish FeMn market structure

Note:in‘000tonnes

Back to top

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15DOMESTIC MARKET

by products and suppliersHC FeMn 1,5 0,5 2,2 4,4 4,8 3,1Russia 0,0 0,0 0,0 0,0 0,0 0,0India 0,0 0,0 0,0 0,6 0,1 0,1South Africa 0,7 0,0 0,0 0,3 0,0 0,2Ukraine 0,3 0,0 2,1 2,6 2,2 2,2Others 0,5 0,5 0,1 0,8 2,5 0,7

MC and LC FeMn 1,7 2,4 1,9 1,6 1,2 0,0Norway 1,3 2,1 1,1 0,2 0,6 0,1South Africa 0,0 0,0 0,0 0,0 0,0 0,0South Korea 0,0 0,1 0,5 1,1 0,5 0,1Ukraine 0,0 0,0 0,0 0,0 0,0 0,0Others 0,3 0,2 0,3 0,3 0,1 -0,2


ESTIMATED HC FeMn CONSUMPTION 2,7 2,8 2,8 2,5 2,5 2,4

BALANCE -1,2 -2,3 -0,6 1,9 2,3 0,7

ESTIMATED MC FeMn and LC FeMn CONSUMPTION

1,0 1,1 1,1 1,0 1,0 0,9

BALANCE 0,6 1,3 0,8 0,6 0,3 -1,0


© Metal Expert

22

MnIndian Mn alloys markets

SiMn spot prices forecast in India

820

821

807

760

750

703

675

640

640

600

650

700

750

800

850

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/t, fo

b

This month, Indian SiMn (65% Mn; 16% Si) has been available at $680-700/t FOB India, down $60/t month-on-month, and the material (60% Mn; 14% Si) – at $625-650/t FOB India, down $60/t.

Indian merchants are still pressured by sluggish demand in the global market and intense competition. Their positions are still quite shaky in Europe and Turkey. Despite the equalization of the chances in the competition with the Ukrainians, the competition with the Europeans is still rather intense. The Europeans try to offload stocks before the end of the year and thus are keener to grant discounts. The gap between Indian and European prices could reach EUR 50/t at times during this month. Demand will possibly burst in the middle of Q1 as the Europeans will try to restock on the alloy before the imposition of an antidumping duty in March. However, demand will not be strong enough for a price recovery, taking into account the negative market picture.

The situation may be aggravated by the appearance of a new rival, Malay-sia. A number of ferroalloy plants are going to be launched there in the future. In Q1, SiMn production will possibly be commenced in Pertama Ferroalloys, OM Sarawak, and Sakura Ferroalloys. At first, Malaysia is estimated to be pro-ducing 10,000-15,000 tpm, but the output may increase to 30,000-35,000 tpm by the end of 2016. New players plan to embrace the markets of Europe, Asia, and the USA, low electricity tariffs and cheap raw materials to be their main competitive advantage.

In the meantime, a lot of Indian suppliers lose their ability to further cut offers. Most of the country’s producers have been working at a loss for the third consecutive month. Production expenses declined by $29/t as a result of the decrease in cost of both import and local manganese ore. Nevertheless, the losses have increased by $19/t to $39/t this month (including all possible


© Metal Expert

23

Mn

compensations). Although there are no incentives for shipments to Europe, some sellers are entering the competitive struggle there, thus suffering huge losses (some $74/t). Within the next few months, the decrease in the alloy prices will be faster than that in raw material quotations, so the profitability will also be on the way down (to $30/t monthly). Only financially strong companies and those few who have their own raw material sources will manage to survive under these circumstances. However, they may soon reach the edge of profitability as well, for their pricing bottom is estimated to be at $700/t FOB India.

Under the circumstances, Indian producers will either have to reduce or stop manufacture. This year, SiMn production may total 1.47 million t (down 9.4% year-on-year) on the back of excessive supply resulting from bad de-mand. In Q1, producers will have to cut output again because of the worsening financial state, some will leave the market. Production may be decreased by 20,000-25,000 t as compared to the previous period to 320,000 t; the volumes of SiMn available for export is estimated to amount to 100,000 t, down 22.5%. However, these measures are likely to show some positive results only in mid- or long-term perspective.

In the coming months, Indian suppliers will not be able to recover prices because of the negative trend in the global market. However, the capabil-ity for price cuts will be limited in view of the difficult financial state of Indian producers.

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24

Mn

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Source:MetalExpert*-forecast,**-preliminarydata***-volumesavailableforexportNote:in‘000grosstonnes

Indian SiMn market structure

Q1 15 Q2 15 Q3 15 Q4 15* Q1 16*PRODUCTION 401 372 351 345 320

by companyAbhijeet Group 22 13 21 - -Bhaskar Group 5 6 5 - -Cosmic Ferro Alloys 5 3 3 - -Nava Bharat Ventures Ltd. 25 7 5 - -Other 345 345 317 - -

IMPORT 0 0 0 0 0

DOMESTIC CONSUMPTION 224 201 231 216 220

EXPORT 177 171 120 129*** 100***by countriesJapan 41 36 27 - -Taiwan 26 22 14 - -Turkey 14 16 5 - -Netherlands 10 9 5 - -South Korea 9 7 6 - -Thailand 8 7 7 - -Germany 5 5 1 - -Ukraine 1 1 1 - -Others 63 68 54 - -

STEEL PRODUCTION 22504 22724 22347 22450 22850


© Metal Expert

25

MnAsian Mn alloys market

Japanese SiMn spot prices forecast Japanese HC FeMn spot prices forecast

835

835

825

770

760

720

700

680

680

600

650

700

750

800

850

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/t, C

IF

799

795

765

730

718

660

630

620

620

550

600

650

700

750

800

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/t, C

IF

The Japan’s market for manganese alloys has again collapsed this month. Prices for Indian SiMn (65% Mn; 16% Si) have dipped by $50/t to $710-730/t CIF Japan. Korean HC FeMn (75% Mn) has been available at $640-660/t CIF Japan, down $65/t, and Indian material – at $660-680/t CIF Japan, down $35/t.

Like earlier, there will be no support from the consuming industry. Japan is going to produce 106 million t of steel in FY 2016 (ends in March 2016), down 3.5% from FY 2015. As a result, consumption of SiMn will drop to 340,000 t and that of FeMn – to 426,000 t.

Supply of FeMn is going to increase in December-February, whereas that of SiMn will decline. Japan will produce 59,600 t of FeMn in winter (up 14.3%); SiMn production will remain at 9,300 t. Due to the usual production cutbacks, South Korea will be able to export only 26,000 t of HC FeMn (down 17%), of which 20-30% may be shipped to Japan. Low profits make Indian producers reduce manufacture, which is why the amount of SiMn available for export will be at about 100,000 t in Q1 (down 29,000 t), of which 20-30% may be supplied to Japan.

SiMn supply structure is changing in Japan and the competition in the seg-ment is getting tougher. As expected, TEMCO has enlarged shipments to Japan. Last quarter, imports from Australia increased by 8,300 t quarter-on-quarter to 10,000 t, its share in the Japanese market coming up from 2.1% to 13%. The share of the alloy imported from Vietnam rose from 13% to 20%. Meanwhile, Indian merchants lost 17% of the Japanese market over April-September, cov-ering only 35% of it. The situation is likely to stay difficult for Indian suppliers, given the expected launch of manganese alloy manufacture in Malaysia. The competition in the Japanese market is going to strengthen in the near future, and Indians will possibly be the ones to yield their market share.


© Metal Expert

26

Mn

Japan SiMn market structure

46% 49% 52% 46% 35%

Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

India Asian countries Domestic production CIS countries Australia Others

The competition is also getting intense for Indian FeMn exporters. South Korean suppliers reduced prices by $65/t and still keep the bottom end of the price range in the Japanese market, their prices being $30/t lower than Indian quotations ($5/t in October). Thus, the Indians will have to accept the price de-crease, or they will lose their market share in Japan. However, Indian suppliers are losing their ability to give considerable discounts as their profitability has been negative over the past few months.

HC FeMn spot prices in Japan

630

680

730

780

830

880

930

980

1030

1080

Oct

14

Nov

14

Dec

14

Jan

15

Feb

15

Mar

15

Apr

15

May

15

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

US

D/t,

CIF

Source: Metal Expert

HC FeMn (75% Mn) origin India

HC FeMn (75% Mn) origin South Korea

Sellers will have to do business in a rather narrow market within the next several months, given that consumption is going to decrease further and the Malaysians will enter the market soon. High competition will eventually result in further price decrease.

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27

Mn

SiMn market structure in Japan

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15PRODUCTION 4,8 3,7 4,4 3,2 3,6 3,1

EXPORT 0,00 0,01 0,00 0,00 0,01 0,00

IMPORT 24,7 23,1 17,3 22,9 19,7 24,1by countryIndia 16,2 11,2 8,4 8,1 9,0 9,7Vietnam 1,1 6,2 2,8 5,4 4,3 5,3Kazachstan 5,7 1,5 4,6 2,6 3,9 2,2Ukraine 0,0 1,6 0,0 0,0 0,0 0,0Indonesia 0,6 0,2 0,4 1,0 0,6 0,8Australia 0,5 0,5 0,6 4,1 0,5 5,2Others 0,7 1,8 0,4 1,6 1,4 0,9

APPARENT CONSUMPTION 30 27 22 26 23 27

CARBON STEEL PRODUCTION 8 402 8 918 8 535 8 841 8 796 8 575

ESTIMATED CONSUMPTION 26 27 23 24 23 24

BALANCE 4 0 -2 3 0 3

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Source:MetalExpertNote:in‘000grosstonnes

HC FeMn market structure in Japan


EXPORT 0,07 0,03 0,03 0,07 0,04 0,06

IMPORT 6,8 8,1 3,9 3,7 9,2 3,5by countrySouth Korea 2,0 4,9 1,3 1,8 4,2 0,8Australia 0,0 1,5 0,5 0,5 2,5 0,5India 2,0 1,4 1,6 0,9 1,5 0,7South Africa 2,8 0,3 0,5 0,5 1,0 1,0Norway 0,0 0,0 0,0 0,0 0,0 0,5Others 0,0 0,0 0,0 0,0 0,0 0,0




BALANCE -8 -5 -11 -13 -12 -17

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28

Mn

South Korea SiMn market structure


EXPORT 2,1 1,3 1,7 2,4 2,4 3,6

IMPORT 9,4 10,3 6,6 6,9 5,0 7,5by countryUkraine 4,4 5,9 3,7 4,7 1,4 3,2India 2,9 2,9 0,9 1,2 1,9 2,7Vietnam 2,0 1,4 2,0 1,0 1,7 0,6Others 0,1 0,1 0,0 0,0 0,0 1,0


CARBON STEEL PRODUCTION 5745 6019 5859 5919 5749 5643


BALANCE -1 0 -3 -5 -7 -2

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29

Mn


South Korea HC FeMn market structure


EXPORT 10,7 13,9 13,1 10,9 10,7 12,7by countryJapan 4,0 3,2 2,2 3,8 1,1 1,9Taiwan 1,6 1,7 0,1 0,3 2,3 3,4United Arab Emirates 1,8 1,2 1,3 1,2 1,2 1,5Saudi Arabia 0,5 2,0 1,0 1,0 1,0 1,4Netherlands 0,0 1,0 1,8 1,7 0,8 1,6Turkey 0,0 0,0 2,5 0,6 2,5 1,0Others 2,9 4,7 4,1 2,2 1,9 1,9

IMPORT 0,2 0,3 1,3 0,6 0,6 0,0Australia 0,0 0,0 0,0 0,0 0,0 0,0India 0,2 0,3 1,3 0,6 0,6 0,0


CARBON STEEL PRODUCTION 5745 6019 5859 5919 5749 5643


BALANCE -1 -1 -2 -4 -3 -4

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30

Mn World Bulk Ferro-alloys Markets November, 2015

© Metal Expert

30

SiEuropean FeSi market

European FeSi spot prices forecast Chinese FeSi export prices forecast

1225

1205

1185

1170

1070

975

940

920

900

600

700

800

900

1000

1100

1200

1300

1400

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

EUR

/t, d

dp

1210

1210

1210

1165

1140

1130

1115 11

25

1125

1000

1050

1100

1150

1200

1250

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/t, fo

b

Silicon

This month, European merchants have had to reduce FeSi quotes once again due to low demand and intense competition. The average monthly price for the alloy (75% Si) has dropped by EUR 95/t month-on-month to EUR 975/t DDP, reaching its 6-year minimum. The US dollar price has dropped by $166/t due to the 5.3% euro devaluation.

Supply has remained excessive in Europe this month. Merchants will most likely fail to offload stocks without losses until the year end. Over the whole year, the surplus may reach 25,000 t, which is 44% of the average monthly consump-tion. In January-February, the market balance is unlikely to recover amid low consumption and the inflow of import material.

Balance of European FeSi market

-30

-20

-10

0

10

20

30

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15

Q4

15*

Q1

16*

'000

tonn

es


31


© Metal Expert

31

Si

Shipments from Malaysia keep depressing the European market. Supply of Malaysian material increases gradually, at the moment accounting for some 4% in the supply structure. Besides, the EUR 20-100/t competitive advantage over European prices (in terms of European quality) allows Malaysians to further strengthen their positions. Soon, Malaysia may cover 7-10% of the European market, and the only measure the Europeans can take to prevent it is to initiate an antidumping investigation against Malaysian material.

There will be no support from the consuming industry within the next few months. The situation in the steelmaking industry is unfavourable due to the upturn in purchases of cheap steel from China (this year, exports from the country may add 17% reaching 110 million t) and constant decrease in domestic quotations. The problem is unlikely to be resolved soon, as the European authori-ties delay making the decision on protective measures. As a result, European steelmakers will keep pressuring raw material prices in order to maintain profit-ability. Besides, steel output will drop by 5.6% year-on-year to 42.1 million t in Q1, so FeSi consumption will approximate 60,000-64,000 tpm.

European FeSi production may be enlarged. Next quarter, it will add 6.4% quarter-on-quarter to 123,000 t, owing to recovery of operations at Icelandic Alloys (120,000 tpy). However, some companies may lower output in view of the unfavourable market environment.

FeSi prices will inevitably keep falling amid excessive supply and the negative conditions in the steelmaking segment.

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32


© Metal Expert

32

Si

Back to top



Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15** Q4 15* Q1 16*PRODUCTION 40 42 42 43 43 43 116 123

by companyElkem 11 11 11 12 12 12 26 35Ferroatlantica 6 6 6 5 5 5 16 16Finnfjord 7 7 7 7 7 7 22 22Fesil 7 7 7 7 7 7 20 20Other 10 11 11 12 12 12 32 31

EXPORT 4 4 4 5 3 3 10 10

IMPORT 23 33 24 26 20 27 73 76by countriesCIS 4 8 5 4 5 5 - -India 3 3 3 4 2 2 - -China 0 0 0 0 0 0 - -Africa 5 3 4 4 1 1 - -South America 0 7 2 2 2 5 - -Middle East 0 2 1 1 1 2 - -




BALANCE -3 3 -1 5 7 7 6 8

European ferrosilicon market structure

European ferrosilicon market [Si content]

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15** Q4 15* Q1 16*Production 30 31 32 32 32 32 87 92Export 3 3 3 4 2 2 7 7Import 17 24 18 19 15 20 54 56Apparent Consumption 44 53 46 48 45 50 134 141Estimated Consumption 46 50 47 44 40 44 129 135Balance -2 3 -1 3 5 6 5 6

33


© Metal Expert

33

SiUS, Turkish & Japanese FeSi market

Back to top


USA FeSi market structure

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15* Q1 16*PRODUCTION 7,5 7 6,2 3,5 3,5 3,5 21 21

EXPORT 1,1 0,9 0,9 0,7 0,6 0,6 2,4 2,2

IMPORT 32,5 24,1 8,8 6,8 30,7 20,0 46,5 38,0by countryRussia 16,0 16,2 0,0 0,0 16,2 0,5 19,0 17,0China 9,3 4,6 5,3 3,9 7,4 8,4 16,0 9,0Venezuela 2,9 0,0 0,0 0,0 3,3 4,8 0,0 0,0Others 4,3 3,4 3,5 2,8 3,8 6,3 11,5 12,0


STAINLESS STEEL PRODUC-TION

6413 6844 6843 7032 6936 6557 19282 18619

ESTIMATED CONSUMPTION 20,9 22,3 22,3 22,9 22,6 21,3 62,7 60,6

BALANCE 18,1 8,0 -8,1 -13,4 11,1 1,6 2,4 -3,8

34


© Metal Expert

34

Si

Back to top

Note:in‘000tonnes*-MetalExpertestimation


Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15EXPORT 0,1 0,1 0,1 0,2 0,1 0,1

IMPORT 4,7 6,3 7,8 10,1 8,1 4,2by suppliersChina 0,7 2,9 2,5 2,4 2,6 2,0Russia 3,0 1,9 2,6 3,5 1,8 0,8Egypt 0,0 0,0 0,0 0,0 0,0 0,0Macedonia 0,0 0,0 1,0 1,0 0,0 0,0Ukraine 0,0 0,1 0,4 1,4 0,0 0,0Others 0,9 1,3 1,3 1,8 3,7 1,3

DOMESTIC MARKET 4,6 6,2 7,6 10,0 8,0 4,1


ESTIMATED CONSUMPTION 7,3 7,7 7,5 6,7 6,8 6,6

BALANCE -2,7 -1,5 0,1 3,3 1,2 -2,5


IMPORT 50,1 39,0 31,8 48,7 30,3 29,5by countryChina 31,9 21,2 20,6 28,3 15,9 12,4Russia 10,7 9,1 1,5 10,8 5,4 10,2Brazil 2,3 4,2 5,9 5,2 4,8 3,7Vietnam 1,0 0,4 0,5 0,6 0,0 0,1Others 4,2 4,2 3,2 3,9 4,2 3,1




BALANCE 16 3 -3 13 -5 -5

Turkish FeSi market structure

FeSi market structure in Japan

35


© Metal Expert

35

CrEuropean FeCr market

HC FeCr (60-65%) spot price forecast in Europe, DDP

LC FeCr (65-70%) spot price forecast in Europe, DDP

0,95

0,94

0,94

0,87 0,88

0,83

0,81

0,81 0,

83

0,60

0,70

0,80

0,90

1,00

1,10

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/lb C

r

2,01

2,00

1,99

1,98

1,96

1,90

1,88

1,88

1,88

1,20

1,40

1,60

1,80

2,00

2,20

Jun

15

Jul 1

5

Aug

15

Sep

15

Oct

15

Nov

15

Dec

15

Jan

16

Feb

16

USD

/lb C

r

Chrome

This month, European prices for HC FeCr (60-65% Cr; 6-8% C) have dropped by around 5% month-on-month to $0.83/lb Cr DDP and those for LC material (65-70% Cr; 0.1% C) – by 1.5% to $1.90/lb Cr DDP.

Supply is still excessive in Europe. By the end of November, the accumulated surplus reached 7,500 t of FeCr in content, some 16% of the average monthly consumption.

European FeCr market balance, in content

-15,0

-10,0

-5,0

0,0

5,0

10,0

15,0

20,0

25,0

Q2

14

Q3

14

Q4

14

Q1

15

Q2

15

Q3

15

Q4

15*

Q1

16*

'000

tonn

es

Source: Metal Expert*-forecast

36


© Metal Expert

36

Cr

Demand will stay low and will prevent the price increase in short-run. Steelmakers are forced to reduce capacity utilization amid intense competition with foreign suppliers and the consequent price decrease. Over January-November, a total of 6.7 million t of stainless steel was melted in Europe, down 3.3% year-on-year. In December, sellers will be trying to minimize their finished steel inventories, so the output is going to lose another 8-10% m-o-m reaching 450,000 t. The usual recover in Q1 will not exceed 10% (25% in 2015, 19% in 2014).

Although South African merchants are having financial problems, the 5% rand devaluation in November will make them increase discounts. The surplus is unlikely to lessen in the global market, although charge chrome production will drop by 2.5% this year as South Africa’s IFM (200,000 tpy) and Tata Steel KZN (150,000 tpy) are still idle. Eskom, a local energy producer, insist on an increase in electricity tariffs during the next financial year by 16.6% against the approved 8%. Coupled with the falling chrome alloy prices, it will make produc-ers cut manufacture.

Three out of the four European FeCr plants are still running at 100% capac-ity utilization. This year, Europe is going to put out 612,000 t of chrome alloys, up 8% year-on-year. Most producers do not plan any production cutbacks in Q1.

Chrome ore prices are on the way down, too. Prices for South African material (40-42% Cr2O3) and (42-44% Cr2O3) have gone down by 13% to $127/t CIF China and $143/t CIF China respectively. Turkish prices have gone down by 11% to $177/t CIF China for lump ore (40-42% Cr2O3) and $193/t CIF China for the material (46-48% Cr2O3). Prices seems to be close to the bottom as the major-ity of local miners are forced to reduce manufacture due to substantial losses.

The price trend in the chrome alloy market is not going to reverse soon because of high supply and low consumption. Yet, the decrease may slow down, given that prices are already too close to production cost.

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37


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37

Cr



Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15** Q1 16*PRODUCTION 36 48 52 49 49 50 155 164

by companyOutokumpu 24 36 40 42 42 42 125 125Vargon Alloys 8,3 8,3 8,3 5,0 5,0 6,0 21 30Albanian Chrome 3,0 3,5 3,2 2,7 2,0 2,5 9 9Other 0 0 0 0 0 0 0 0

EXPORT 1,3 4,9 9,7 21,7 13,6 14,5 20 24

IMPORT 77 85 76 75 49 68 185 211by countriesSouth Africa 44 57 58 58 34 49 138 148Zimbabwe 13,8 5,0 0,4 2,5 0,8 6,0 7 8Russia 1,2 0,5 0,7 0,7 0,2 0,5 2 8Kazakhstan 4,3 6,9 2,8 1,9 2,1 0,5 5 7Turkey 3,9 2,2 2,8 1,7 2,0 1,9 9 8India 4,7 3,7 4,8 4,9 3,3 5,1 10 9Other 4,3 9,5 6,9 4,9 7,0 5,1 16 24


STAINLESS STEEL PRODUCTION 630 665 666 553 420 600 1490 1750

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15** Q1 16*PRODUCTION 2,5 2,5 2,7 2,7 2,7 2,7 8 8

by producersElektrowerk Weisweiler GmbH 2,7 2,7 2,7 2,7 2,7 2,7 8 8

EXPORT 0,7 0,9 1,4 1,5 0,5 0,7 4 4

IMPORT 5,0 7,0 6,6 5,9 4,3 6,7 20 16by countriesRussia 2,0 2,4 1,9 1,9 1,4 3,1 8 9Other 3,0 4,6 4,7 4,0 2,8 3,6 12 7

APPARENT CONSUMPTION 6,8 8,6 7,9 7,1 6,4 8,7 23,5 19,5

STAINLESS STEEL PRODUCTION 630 665 666 553 420 600 1560 1750

European HC FeCr & Charge Chrome market structure

European LC and MC FeCr market structure

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CrEuropean & US FeCr market



Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15* Q4 15*DLA sales 2,5 0,3 0,5 0,0 0,0 0,0 0,2 0,1

EXPORT 0,6 0,5 0,8 0,8 0,7 0,5 2,0 2,0Canada 0,5 0,5 0,8 0,8 0,6 0,5 - -

IMPORT 65 41 16 25 46 38 105 109by countrySouth Africa 42,6 30,7 8,4 1,5 16,8 16,0 - -Finland 0,0 0,0 0,0 7,5 7,1 16,1 - -Kazakhstan 0,0 0,0 0,0 11,0 0,0 0,0 - -Zimbabwe 1,8 1,0 1,7 4,2 3,1 3,9 - -

APPARENT CONSUMPTION 66,6 40,8 15,4 24,4 44,8 37,9 103,6 107,6

USA HC FeCr & Charge Chrome market structure

European FeCr market structure [in Cr content]

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Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15* Q1 16*Production 22 29 31 30 29 30 92 96Export 1,2 3,4 6,4 13,2 8,1 8,6 14 16Import 46 51 45 44 29 41 112 124Apparent Consumption 67 76 70 60 50 63 191 207Estimated Consumption 70 74 74 61 47 67 173 194Balance -3 3 -4 -1 4 -4 18 13

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Cr

USA FeCr market structure [in Cr content]

Source:MetalExpert,100%Mnweightbasis*-forecast,**-preliminarydataNote:in‘000tonnes

Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15* Q4 15*DLA sales 1,8 2,6 0,4 0,1 0,1 0,0 1,0 0,7Export 0,5 0,5 0,7 0,6 1,0 0,5 2,0 2,0Import 44,0 26,2 10,3 17,5 31,2 23,4 71,3 72,8Apparent Consumption 45 28 10 17 30 23 70 71Estimated Consumption 27 27 27 27 27 27 74 80


Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Q4 15* Q4 15*DLA sales 0,3 3,6 0,1 0,1 0,2 0,0 1,2 0,9

EXPORT 0,2 0,3 0,3 0,1 0,8 0,2 1,0 1,1Canada 0,2 0,3 0,3 0,1 0,1 0,2 0,0 0,0

IMPORT 12,4 6,1 2,1 4,4 6,1 1,3 13,5 12,3by countryRussia 9,6 5,0 0,3 1,3 3,5 0,1 - -Germany 0,5 0,5 0,9 0,6 0,3 0,4 - -China 0,9 0,3 0,2 0,9 0,8 0,4 - -Kazakhstan 0,6 0,0 0,0 1,2 0,0 0,0 - -


USA LC and MC FeCr market structure

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Cr


Japanese FeCr market

Japanese HC FeCr & Charge Chrome market structure

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IMPORT 51 62 62 38 64 51by countriesKazakhstan 33,3 21,8 34,9 22,0 20,3 16,5South Africa 12,3 33,1 19,8 9,8 40,2 25,9India 3,8 3,1 5,5 5,0 2,3 4,3Finland 1,0 1,4 1,2 1,1 1,1 1,2TURKEY 0,0 2,6 0,0 0,0 0,1 0,0Others 0,7 0,1 0,4 0,4 0,3 3,5


SPECIAL STEEL PRODUCTION 1 549 1 593 1 536 1 562 1 496 1 597by typesStainless steel 205 220 225 231 232 246Other specialty steel 1 345 1 372 1 311 1 331 1 265 1 352


BALANCE 2 9 9 -16 11 -6

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Cr


Japanese FeCr market structure [in Cr content]


Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15Production 1,3 1,3 1,3 1,3 1,3 1,3Export 0,2 0,2 0,2 0,2 0,1 0,1Import 34,3 39,6 41,0 26,1 38,8 32,8Apparent Consumption 35 41 42 27 40 34Estimated Consumption 33 35 35 36 35 37Balance 3 6 7 -8 5 -3

Japanese LC FeCr market structure

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EXPORT 0,3 0,3 0,3 0,3 0,2 0,2

IMPORT 3,7 6,2 5,1 3,9 3,8 4,7by countriesRussia 1,2 1,2 1,2 1,6 0,9 2,2South Africa 0,8 2,0 2,5 1,1 1,4 0,3China 0,9 1,2 0,4 0,2 0,8 0,6Kazakhstan 0,7 1,4 1,1 0,6 0,5 1,3Others 0,1 0,4 0,0 0,3 0,2 0,2


SPECIAL STEEL PRODUCTION 1 549 1 593 1 536 1 562 1 496 1 597by typesStainless steel 205 220 225 231 232 246Other specialty steel 1 345 1 372 1 311 1 331 1 265 1 352


BALANCE 0 3 2 0 0 1

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