Japan's Base Alloy Market Prices Are On A Downward Trend

The Japanese manganese-silicon alloy market continues to weaken gradually due to sluggish demand, so suppliers have been forced to make major concessions in order to secure deals.

The quotation of silicomanganese (65%Mn; 16%Si) fell by an average of US$25 week-on-week to US$960-980 CIF. However, buyers felt the price was still too high. Also, lower prices were announced starting this weekend at $950 CIF, but not all suppliers are ready to drop their offers to that level. "This is a very low price and some market players may be clearing their inventories despite the lack of margins," said a silicomanganese supplier in India.

Ferrosilicon suppliers have made bigger concessions. Ferrosilicon (75% Si) was quoted at $1,440-1,470 CIF, compared with $1,510-1,540 CIF a week ago. Prices are likely to continue to fall due to weak demand. Offers from Chinese suppliers were at the lower end of the range, prompting sellers to adjust prices for alloys of Russian and Malaysian origin.

The situation in Japan's consumer sector is not encouraging; Japanese steelmakers are cutting production. National steel production is forecast to drop 4-5% year-on-year this quarter. Therefore, factors of subdued demand will continue to weigh on offer prices for basic ferroalloys.