LONDON, Oct. 28, 2019 /PRNewswire/ -- Prices under fundamental pressure
Prices in the global ferroalloys market have come under sustained downward pressure this year. This has been due to a combination of factors that include slowing global economic growth; uncertainty from the US-China trade war; deteriorating conditions in the steel, stainless steel and end-user sectors; and persistent oversupply in regional markets. As a result, there have been price declines in most spot markets, as sellers have competed aggressively to conclude transactions.
While global steel production grew in the first half of 2019, the run in to year-end is looking depressed across the supply chain. Construction activity in China, which had fuelled steel demand growth, stuttered over the summer, while the weakness in the global automotive sector shows no sign of ending. Rising trade tensions, the impact of Section 232 and Brexit are all also generating uncertainty and driving the bearish sentiment. Announcements of significant cuts in steel production by companies including ArcelorMittal, CSN, US Steel and Gerdau have failed to halt the slide in steel prices seen in many regions. This has put producers under severe margin pressure and they have been hardening their stance with their suppliers.
Downward price pressure a reality
Manganese ore and ferroalloys markets are therefore under pressure. Despite reasonable levels of demand, semi-carbonate manganese ore prices have been falling since the end of 2018, and are fast heading towards levels last seen in early 2017. Fearing further price falls, buyers have been unwilling to commit to large volume purchases and sellers have reduced offers to conclude business.
Likewise, ferroalloy tender volumes for major steel companies are down but, with smelters maintaining high production levels, the resulting oversupply has driven manganese alloy prices down in China, Europe and North America. In Europe, silicomanganese prices are already at a two-year low and North American prices, while commanding significant premia over European levels, have followed a similar trend. European silico-manganese prices have fallen by 7.8% and North American prices are down by 6.3% year-to-date.
Read the full story:
https://www.crugroup.com/knowledge-and-insights/insights/2019/how-declining-prices-and-weaker-fundamentals-are-affecting-the-ferroalloys-market/
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