East and West don't see eye to eye in midsummer markets

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June saw re-emergence of Japan, Taiwan and South Korea as buyers in the markets for minor metals and ferro-alloys, with first signs of revival in the Far Eastern steel and non-ferrous sectors, while Europe and the US are winding up business for the summer holidays. However Japan's attempt in June to purchase cobalt and vanadium in the free market for its stockpile went out not with a bang but with a wimper at the end of the month, having prompted prices to jump to levels it was not prepared to pay. It is now looking for molybdenum, but again is facing a hike in spot prices.

China still remained the dominant force in the market through the June quarter, but now trouble is brewing.

China and its western customers have been exchanging harsh words at the WTO this month, while the country's aluminium giant Chinalco lost its hoped-for deal with Rio Tinto, which tied up a joint venture with its former suitor BHP Billiton instead after a shareholder revolt against Chinese investment.

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At the end of the month China in turn dealt a blow to its western suppliers by declaring that it's stockpiled all the metal it needed to aid recovery, indicating that this year's shopping spree, which has to date sustained the flagging western markets, might be at an end.

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At the same time the country's exports are facing more anti-dumping investigations in Europe and the US, as well as protectionist measures against its steel in the other BRIC countries, Brazil, India and Russia, who are all eager to protect the early shoots of recovery in their industries.

Protectionism from exports on one hand, but on the other Europe and the US complained to the WTO that China is restricting exports of its monopoly commodities by its annual quota system and a range of export taxes. This, they allege, is hurting European and North American producers who rely on China for their raw materials, and undermines their competitiveness in downstream markets. China is defending its stance, arguing that it is limiting exports in order to protect the environment and check the indiscriminate mining of its resources.

It is also keen to encourage domestic manufacture of high value added products, so supporting its western competitors in these sectors is hardly going to be its priority.

However some relief for both exporters and importers is coming from July 1, as Beijing has cut export taxes for indium, molybdenum metal and some molybdenum products from 15% to 5%, and on APT and tungsten products from 10% to 5%.

Meanwhile the markets in the west are now heading into what is traditionally the quietest period for business. While the bulls point to signs of recovery, hoping for an early end to the global recession, bears note that it is unusual for the second half of a year to be better than the first. The third quarter is likely to be difficult, and most markets are really looking for a definite direction only from September onwards.

ANTIMONY

Antimony maintained an upward trend in China this month amid tight spot availability caused by a shortage of antimony. Prices of antimony ingot reaching Rmb31,000-32,000/tonne ($4,545-4,692/tonne) in the domestic market in late June, compared with Rmb30,000-30,500/tonne ($4,405-4,478/tonne) seen at the start of the month.

Export prices have rebounded to $4,770-4,870/tonne FOB at the end of the month, up from $4,580-4,680/tonne FOB seen in early June.

In tandem with the metal, prices of antimony trioxide have gone up to Rmb28,500-29,000/tonne ($4,178-4,252/tonne), compared with Rmb 26,000-27,000/tonne ($3,812-3,958/tonne) at the start of the month.

Export prices of antimony trioxide at the end of the month were $4,180-4,280/tonne FOB, compared with $3,900-4,000/tonne FOB only four weeks earlier.

The rising Chinese market also pushed up overseas prices of antimony metal steadily and relentlessly through the month.

Demand in the West continues to be limited, with both traders and consumers holding stocks due to the current high prices and a lack of confidence that these levels will be maintained throughout the summer period.

Prices in Europe have risen above the previous high of $4,550-4,650/tonne for grade II antimony ingot and $4,650-4,700/tonne for low bismuth material in the middle of May and are now at $4,700-4,800/tonne for grade II and $4,800-4,850/tonne in warehouse Rotterdam.

Prices for shipment from China are creeping up to the $5,000/tonne FOB mark which some players feel has been the objective of the Chinese.

BISMUTH

The bismuth market continues to be lacklustre with prices for material from China drifting down as well as in Europe where demand is only for small quantities. There has been plenty of material in the market to meet the poor demand allowing prices to fall.

Only towards the end of June was there a small sight of firming up in prices, with 4N bismuth trading in the range of $6-8.7/lb in the western spot market.

In China, the domestic market for bismuth has continued to see a lack of consumer buying throughout June. Most suppliers have been unwilling to sell the 4N ingot at prices less than Rmb85,000/tonne ($5.65/lb) and offering Rmb86,000-87,000/tonne ($5.72-5.79/lb).

Prices of about Rmb87,000/tonne ($5.79/lb) for bismuth ingot have been reported in the later part of the month, and higher prices of Rmb87,000-88,000/tonne ($5.79-5.85/lb) have also been visible in domestic market, although many participants have not been too positive in their outlook.

Prices in the range of Rmb90,000-91,000/tonne ($5.99-6.05/lb) for small purchases have also emerged into the market towards the end of the month.

The export market, in the meantime, continued to be quiet, with few overseas buyers having been active in purchasing bismuth. However, higher export prices between $6.0-6.3/lb were reported in the later part of the month, although these were only achievable for small purchasing quantities.

CADMIUM

Demand for cadmium from China and India has tailed off to some degree during June, with prices drifting accordingly. Material was reported to be still tight from producers for prompt delivery, although towards the end of the month trader reported an Eastern European source to have 3-4 containers of 3N5 material available, but confirmation of the material’s quality has not been made.

In Europe, prices for 3N5 material have fallen from $1.60-1.70/lb in warehouse at the end of May to $1.20-1.30/lb, whilst 4N material drifted from $1.70-1.80/lb to $1.35-1.40/lb.

In the domestic Chinese market, prices have held steady amid a lack of purchases, with the market supported by low stocks.

What business was reported in the course of the month was generally concluded at prices around Rmb 28,500-29,000/tonne for 4N cadmium ingot. Prices above Rmb29,000 tonne that were still seen in early June became difficult to achieve by the end of the month.

In India prices eased compared to May due to a slowdown in demand and also reflecting the weaker dollar. The market edged dow to INR 214/kg

for 3N5 cadmium and INR 225/kg for 4N purity metal in the later part of the month from INR 231/kg for 3N and INR 243/kg for 4N cadmium in early June.

CHROMIUM

June brought the closure of Elemetis Chromium's chromium chemicals plant in the UK.

The Eaglescliffe plant, one of the few remaining western producers of chromium oxide, fell victim to lower priced imports from China, and was deemed less competitive than its US-based sister operation.

The market for chromium metal has been fairly stable, although the spread on prices has widened again.

In Europe, the metal has been trading mostly in the range of $7,700-8,200/tonne for Russian and Chinese material, with prices around $8,500 and upwards for western material. In the US prices have been reported upwards of $8,800/tonne.

COBALT

On the approach of the third quarter cobalt prices prices performed a similar pirouette in June to that seen in March ahead of the second quarter.

Price dived in the first week of the month and then proceeded to pare losses as the month progressed, finally rallying strongly at the end of June, although not everyone shared in the bullish talk of renewed consumer demand.

A purchase by the Korean stockpile was a factor in the revival of cobalt's fortunes, with the country raising its estimated stockpile demand in 2009 from 64 to 85 tonnes of the metal.

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However Japan's JOGMEC which had hoped to buy cobalt of the national stockpile before the end of the month was put off by rocketing prices and postponed its tender to July.

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Prices for Russian 99.3% material gained some $2-2.50/lb in the course of the month. Prices in warehouse Europe rose from $12.50-13.50 at the turn of the month to around $15.20/lb at the end of June.

Purchases from the battery sector have picked up as the summer progressed, according to market sources, however remain well below last year's level. Renewed Chinese buying in late June, with Jinchuan material particularly sought after, has contributed to the rise in prices of high grade metal, although China has not been as active for most of June as had been hoped.

Prices for 99.8% cobalt metal, which traded almost in line with lower grade material in the early part of June again marched upwards towards the end of the month, extending the price gap with 99.3% metal to around $1-$1.50/lb. In the last days of June high grade material traded up to around $16.50/lb, up from $14-15/lb at the start of the month.

Rising prices of cobalt concentrates, which have gone up from around $11/lb at the start of the month to closer to $13/lb by the end of June also contributed to increased interest in refined metal.

The Chinese cobalt metal market had lacked consumer buying in the earlier part of June. For a while the market was in limbo, with suppliers unwilling to accept lower contractual prices of Rmb270-280/kg ($17.96-18.63/lb) for the 99.8% minor metal and buyers being cautious on purchasing.

However, in the later part of the month the market prices have appeared to head north, in line with the rallying market overseas. Some Chinese suppliers have quoted Rmb330/kg ($21.95/lb) for 99.8% cobalt towards the end of June although market business has not been as active as expected.

Meanwhile prices for 72% mi cobalt oxide have fallen to about Rmb210/kg ($33.88/kg) this month. However, on the back of the price increase for cobalt metal seen in the latter part of the month, prices for cobalt oxide have also turned to the upward track and current prices are ranging at Rmb230-240/kg ($37.11-38.72/kg) albeit suppliers still complaining the weak demand.

Cobalt chloride (grading 24% min cobalt) prices have rebounded by about Rmb2,000/tonne at the start of June after the price decrease seen in May, up to Rmb65,000-66,000/tonne ($9,533-9,680/tonne) from Rmb63,000-64,000/tonne ($9,240-9,387/tonne), as some consumers have been inclined to replenish their stockpiles at relatively low prices.

However, the market has calmed down in the following week with larger purchases having again vanished from the market. Some small parcels have been reported at about Rmb70,000/tonne ($10,267/tonne). The market has been holding relatively steady in the following two weeks although the more bullish suppliers have already increased their offer prices to about Rmb75,000/tonne ($11,000/tonne) for the chloride.

The Chinese market for cobalt oxalate has been quiet in June although offer prices for the oxalate grading 31% cobalt in later part of the month have moved up to about Rmb110,000/tonne ($14,892/tonne) from the low prices of around Rmb91,000-93,000/tonne ($12,320-12,591/tonne) seen in the beginning of the month.

GALLIUM

The gallium market has been dead for weeks and weeks and remains so although gallium is being added to the list of minor metals to be stockpiled by Japan. The Japanese said that it would be timely now to buy for their stockpiles as prices are low but no date has been announced for the purchases.

In the meantime gallium prices in the western market have been creeping along the bottom, at $360-450/kg CIF.

GERMANIUM

Western germanium prices remain weak as more competitive offers emanate from China.

Since breaking the critical $1,000/kg support in May prices of the 4N grade metal have continued to fall steadily as the summer progressed, to $950-1,080/kg at the start of June and eroding to $930-1,030/kg by the end of the month.

Prices for germanium dioxide fell in line with the metal with prices below $700/kg in mid June and pegged at $580-80/kg in the later part of the month.

Although some Chinese suppliers are said to be unwilling to drop their prices for germanium metal further, recent levels of $920-940/kg FOB for 4N metal have been reported, but with little to no business being attracted. There is still a lack of consumer buying in the market.

Chinese germanium prices have been on the downward track throughout June, although some suppliers claimed they would not cut prices further to sell the material.

Prices of about Rmb6,500/kg ($913/kg) for 4N germanium metal have been visible in the market at the start of the month and Rmb3,700/kg ($570/kg) for 5N germanium dioxide have also been reported.

In the following two weeks the market price has stayed relatively stable although demand remained weak. However, prices have moved further down to about Rmb6,300/kg ($885/kg) in the late part of the month and lower prices of around Rmb6,000/kg ($842/kg) have also been visible.

In the export market some suppliers have been holding their quotations at about $950/kg earlier this month and would not accept lower prices. However some offer prices in the second half of the month have headed south to $920-930/kg despite little business done.

INDIUM

The Chinese indium market has experienced a price rebound in June on the back of the reserves of the Japanese government and Hunan Nonferrous. Some Chinese suppliers have raised their prices for 4N indium to about Rmb2,100/kg ($354/kg) in the middle of the month from Rmb1,800-1,900/kg ($304-320/kg) over the preceding weeks.

Much higher offer prices of Rmb2,300-2,400/kg ($388-405/kg) for 4N indium have also been visible in Chinese domestic market in the later part of the month as some suppliers have become more bullish, although the market business has still not been as active as imagined.

Meanwhile, Beijing has announced a cut in the export tax on indium from the previous 15% basis to 5%, which will be effective from 1 July, but the export market has continued to be quieter than hoped.

Enquiries have emerged for 1-5 tonnes rather than a few hundred kilos, however in spite of higher offer prices most concluded business in the last week of June was around Rmb2,000/kg.

Market players feel that the market is more stable, but that it will be some weeks or so before prices change significantly. Broadly prices in the western market are in the range $300-400/kg with some business taking place outside this range.

Although China has said it will not add any material to its current stockpile for indium,

Japan is planning to take advantage of a price fall to roughly double its national stockpile of minor metals including indium.

More positive signs have recently come into the market as sales of flat-panel televisions are reported to be surging in China, with top Japanese, South Korean and Taiwanese manufacturers of panels and materials following and returning to full production. 

South Korea’s Samsung Electronics, the global leader in LCD panels, has begun operating a new assembly line for large panels at its 50/50 joint venture with Sony Corp doubling its monthly output capacity to 140,000 units.

A fellow South Korean, flat-screen TV manufacturer, LG Electronics, has reiterated its previously stated goal of selling 18 million LCD sets in 2009.

SELENIUM

Selenium and antimony are about the only two minor metals that have not suffered from decreasing demand over the past few weeks and falling prices. Demand for selenium continues to be steady and firm from both Asia and Europe. Material is fairly tight giving the basically balanced market a slight tip towards demand being dominant.

Western prices are now reported in the range $19.50-22.50/kg for 200 mesh 99.9% material depending on tonnage and destination.

Prices in the Chinese domestic market are reported to be steady and demand good for selenium dioxide for the production of electrolytic manganese metal flake.

RHENIUM

There have been more discussions than business for rhenium, with buyers pushing for lower prices, and an offer of catalyst grade APR also emerging as low as $ 5,000/kg, although this is not yet a mainstream price for catalyst grade material.

However prices are almost half what they were at the height of the market a year ago.

Most market participants concurred that prices are now in the high $ 5,000s for catalyst grade APR, however concluded business for limited volumes has also been reported recently at $ 6,500/kg.

Rhenium pellets are trading in a range of $ 5,000-5,500/kg.

Prices for basic grade material have fallen to $4,000-4,500/kg in the course of June, and there have also been bids in the region of $3,500/kg reported, with particularly low prices seen in the US.

In the aerospace market, rhenium has been the victim of its own success, with prices above $10,000/kg at the height of last summer scaring engine manufacturers into ramping up their efforts to find a replacement.

GE has managed to successfully reduce the amount in rhenium it requires in its blade superalloy and claims to have engineered it altogether out of the nickel-based alloy used on stationary parts of the engine. Rolls-Royce is understood to be conducting research along similar lines and to be keeping its rhenium consumption low, with minimum fractional requirements in the alloys it uses. The latter also recently offered some of its surplus stock back to the market, which has served to further depress prices.

TITANIUM

The year continues to unpromising for titanium as the third quarter draws near, with demand at probably half the anticipated level.

Producers with long-term contracts are finding some protection from these in a troubled market, but all are running at reduced capacity, including market leader VSMPO in Russia, which said this month it expects production to be some 15-20% down from 2007 level.

In the aerospace sector, there were fewer than usual orders for aircraft, most of which were hoovered up by Airbus. Russia's Sukhoi also secured both domestic and overseas orders for its Superjet, produced in a joint venture with Alenia Aeronautica, which it brought to the show.

Boeing did not bring its 787 to the show but assured that it would fly by the end of the month - which it didn't as body sections had to be further reinforced. This is another disappointing blow to the titanium industry, as the composite aircraft has the largest proportional consumption of titanium of all Boeing commercial planes, and some of the recent planned capacity expansions in the titanium industry have been geared up to it. Another major programme with a question mark over it is Airbus's A400m military freighter for which European defence forces have sighed the largest ever aircraft purchasing contracts. The three-year delay has imperiled the order, the fate of which was due to be decided by a meeting of European defence ministers in Seville at the end of June and has now been postponed to the next meeting at the end of July in Paris.

In the spot market, TG100 grade sponge has been trading at around $6-7/kg in June, below the level of established long term contracts for the material.

Metallurgical grade sponge, which has been trading in tandem with ferro-titanium this year is now trading at a discount, with prices in June still reported at $2.40-2.60/kg in warehouse.

The Indian downstream titanium market remained sluggish in June, and is likely to remain so in the short term.

Prices of pure titanium strip 0.5-0.6mm have been reported in a range of $40-45 per kg, compared with $ 50/kg last year.

Titanium in India is mainly used in the production of the heat exchangers, used in shipbuilding and power equipment. However, affected by the economic crisis, the shipbuilding and power industries are not booming, and their demand for titanium is limited, resulting in depressed prices for the metal.

TUNGSTEN

Prices in China for 88.5% grade APT have rebounded to Rmb92,000-96,000/tonne ($152-159/mtu) in late June, up from the prices of Rmb90,000-94,000/tonne ($149-155/mtu) seen at the beginning of the month. However smelters do not think that prices have much further to rise, considering the weak demand from downstream smelters and overseas consumers.

The export prices have kept unchanged at $180-185/mtu, without any change compared with the prices last month. But the prices in July might be adjusted slightly as Chinese government will the export tax for APT to 5% from the current 10%. In the course of June prices of APT in Europe have not moved from the range of $180-185/mtu.

Domestic Chinese prices for tungsten carbide have remained relatively stable at Rmb150-155/kg ($21.99-22.72/kg) in the past four weeks, but the export prices have slipped to $24-25/kg last week from the previous $25-26/kg seen early this month. The market is expected to keep gloomy in the coming month.

ZIRCONIUM

Zirconium oxide prices have been holding steady in China in the course of June although zircon prices have been firming on the back of reduced supply. Zircon prices moved into a range of Rmb 7,400-7,500/tonne ($1,193-1,209/tonne) for 65% min Zr grade material mid June, up from Rmb 7,200-7,300/tonne ($1,161-1,177/tonne) earlier in the month.

Market players reported that prices for 99.5% zirconium oxide around Rmb 28,500/tonne ($4,177/tonne) throughout June, despite suppliers still complaining of weak demand. Prices for 99.9% zirconium oxide have remained in the region of Rmb 37,500/tonne ($5,496/tonne).

Business for zirconium oxychloride has been just ticking over aduring the course of June. Prices for zirconium oxychloride grading 36% min zirconium content continued to be reported in the range of Rmb 9,300- 9,600/tonne ($1,305-1,347/tonne) delivered to Shanghai, witout evident change in teh course of the month.

MAGNESIUM

Domestic Chinese prices for magnesium ingot were Rmb15,000-15,500/tonne ($2,199-2,272/tonne) ex works at the start of June and dropped steadily to Rmb14,600-15,100/tonne ($2,140-2,214/tonne) ex works by mid-June. After that, producers have managed to adjust their prices to Rmb14,800-15,300/tonne ($2,170-2,243/tonne) ex works, which have kept relatively stable for the rest of the month.

Export prices have fallen to $2,480-2,600/tonne FOB in lae June, down from the prices of $2,570-2,670/tonne FOB seen mid-month.

The market outlook for the coming month of July is not optimistic, and prices are unlikely to rebound, due to ongoing weak demand from both domestic consumers and overseas buyers.

Indian domestic offer prices for magnesium ingot have fallen in line with import prices of magnesium from China, with purchase prices reported at an equivalent of $2,530/tonne.

Traders said prices in late June were definitely weaker then tat the start of the month were likely to fall lower.

In Europe, spot prices for magnesium ingot stabilised in the second half of June after shedding some $ 50 a tonne around the start of the month.

Business activity persisted at a relatively low level, but enough to support the market at $ 2,550-2,650/tonne in-warehouse Rotterdam, in late June.

With magnesium demand in Europe tied up heavily with aluminium alloys for car manufacture, the fall-off in production by European carmakers across the board continues to depress the market.

The continuing decline of the automotive industry also heaped more downward pressure in June on the price of magnesium ingot in the United States.

Plans by General Motor Corp to halt production at 13 assembly plants for an additional nine weeks continued to hit the U.S. die casting industry and most metal suppliers are expecting a slower than usual summer.

Magnesium prices moved lower at the start of June, but held steady at $2.40 to $2.60/lb delivered at the end of the month.

Traders believe the metal may now be starting to find a bottom but may come under renewed pressure if demand fails to pick up later in the year.

Uncertainty in end-user markets such as auto has pushed back magnesium contract negotiations for 2010 until later this year as consumers rethink order books.

MANGANESE

In mid-June Chinese environmental authorities held a meeting with some 54 manganese smelters, requiring them to implement rules and regulations to control pollution emissions in the next few months or face shutdowns.

The environmental crackdown was unsettling for the market, as producers anticipated higher costs associated with installing pollution controls, and held on to their material, in the hope of higher prices.

Domestic prices for 99.7% min grade manganese flake shot up to Rmb 13,000-13,500/tonne ($1,906-1,979 before 20% export tax) basis ex works in mid-June, from the previous level of Rmb 12,800-13,000/tonne in early June.

Towards the end of the month, however, prices fell back to Rmb12,700-12,900/tonne ($1,862-1,891 before 20% export tax) basis ex works, having encountered resistance from consumers as domestic demand flattened out.

Exporters who had hiked their prices by $50/tonne on the back of the firmer domestic market and were offering $2,400-2,500/tonne FOB in the middle of June, have secured few sales above $ 2,400/tonne. Export prices came back down by at least $50/tonne the end of the month.

European manganese flake prices have followed the Chinese trend in the course of June, rising successively to $2,350-2,450/tonne in warehouse Rotterdam in early June, then to around $2,380-2,480/tonne and finally brushing above $2,500/tonne in late part of the month.

In the last week of the month, however, the European spot market slipped back some $50/tonne again in line with reduced offers by Chinese exporters.

European spot prices ended the month at around $ 2,400-2,450/tonne basis in-warehouse Rotterdam, depending on delivery terms, with manganese lumps around $ 50 above that level.

SILICON

The European silicon market headed downhill in the course of June, with prices crumbing against very slow demand in the secondary aluminium sector, which has been hammered by cuts in car production.

At the end of June market prices in standard secondary aluminium-grade (98.5% grade) (5-5-3) are at €1,600-1,650/tonne basis FCA (free on truck) basis duty delivered paid, down from €1,650-1,700 in the earlier part of the month.

Better grades of low iron content silicon (4-4-1) ended the month in the range of €1,800-1,850/tonne basis DDP (delivered duty paid), some €100/tonne down.

Spanish producer Ferro-Atlantica announced in June it is planning to reduce its production by 75,000 tonnes this year.

Its French plant, which reopened in April is due to run only until October.In Spain, the Sabon plant is operating only one furnace partially and is expected to produce no more than 20% of its capacity. In South Africa, Silicon Smelters, which has only 2 furnaces running, will produce 25% less than in 2008, Ferroatlantica said.

The Spanish company, which is due to start construction later this year on a silicon smelter in Sichuan, China, blamed the need to cut production at its current operations in Europe and South Africa on slower than hoped for recovery in demand from aluminium and chemical sectors.

In the United States demand from secondary aluminium and chemical consumers also remained in the dumps, depressing silicon prices further in June.

Demand for silicon from secondary aluminium consumers has been squeezed by the major slowdown in the struggling automotive sector.

The problems continue to mount as one of the US big three carmakers General Motors Corp. filed for Chapter 11 bankruptcy at the start of the month and said it is considering implementing more production down weeks in the third quarter.

Against this background, prices secondary aluminium grade silicon (5-5-3) in the U.S. dipped to a range of $1.10 to $1.15/lb in early June and continued to hold in this range until the end of the month.

BULK ALLOYS

FERRO-SILICON

In Europe ferro-silicon prices in June were supported by the rise in Chinese prices in the earlier part of the month, and the market mid-month was trading in the range of €825-875 tonne basis duty delivered paid, depending on tonnage, grade and delivery.

To an extent, prices have reflected the movements of the exchange rate, but overall they have been buoyed by supply tightness following extensive production cuts and better than expected consumer demand due to reduced stocks of material at steel mills, which in turn prompted more trade activity.

In the United States, spot ferro-silicon prices also gathered strength in the second half of June, climbing a few cents a pound, as supply tightness and stronger demand have boosted the market. The spot market at the end of the month was at 62-65 cents a pound on a delivered basis, with dealers expecting more gains in the coming weeks as prices are well down on last year’s levels.

MANGANESE ALLOYS

Silico-manganese prices in the United States have weakened again in teh course of June after stabilising briefly in May. Ready availability of material has given leeway for prices to move further down, although underlying demand has been stronger compared with other manganese alloys.

Spot silico-manganese was trading at 35-38 cents/lb in the US at the end of June, off a couple of cents on the month.

By contrast, in Europe silico-manganese edged up another €20 a tonne in the second half of June, after gaining some €80 around the start of the month, on renewed low-level buying and tight availability.

Spot silico-manganese was trading at €730-780 a tonne basis delivered in the last days of June, and btter quality material was fetching around €800/tonne.

However, ferro-manganese prices have fallen back in the course of the month, in line with weak consumer demand in the steel industry. The market which had for a long while traded at a premium to silico-manganese ended up trading significantly below it in June, paring gains made in May as a small increase in buying activity has fizzled out.

High carbon ferro-manganese material was trading at around €680-730 a tonne basis delivered works in the last days of June, from €700-750/tonne earlier. Medium carbon alloy came down €50/ tonne to €1,050-1,150/tonne on the same basis, while low carbon material had lost €100, trading around €1,300-1,400/tonne.

Due to high prices of manganese ore charged by national monopoly MOIL, Indian ferro-alloy producers have come to rely heavily on imports manganese ore. Most imports have been coming from Brazil, according to local market sources.

Indian manganese alloy prices picked up in mid-June and remained stable for the remainder of the month.

Demand has improved, but the market was primarily driven by a scarcity of manganese ore and the shortage of power, as many of the ferro-alloy producers who have a captive power source have been getting better returns from selling it to the grid than from using it to produce ferro-alloys. It is estimated that Indian production of manganese ferro-alloys is down by some 20% from a year ago.

The domestic ex-works price of ferro-manganese has risen to over INR 43,000- 45,000/tonne ($937-939/tonne), and silico-manganese has also edged up to INR 38,000-40,000/tonne ($794-835/tonne) ex works in mid June, with prices in the range of INR 40,000-42,000/tonne also reported at the end of June for 60/14 grade and at INR43,000/tonne ($898/tonne) ex works for 65/17.

FERRO-CHROME

Charge chrome settlement for the third quarter between South African producers and European steelmakers came at the end of the month at $0.89/lb, ending weeks of speculation and finally giving the market some direction.

Prices have also been boosted by higher costs of chrome ore, which went up in June to around $150/tonne CIF China for South African and around$25-/tonne CIF for Turkish ore.

With Samancor, one of the largest ferro-chrome producers in South Africa suggesting that the country's smelter need a base selling price of$0.90/lb for high carbon ferro-chrome to make a profit, and anticipations that energy tariffs from South African power supplier Eskom will go up by 34% (in practice they went up by 31.3% from July), there have been some speculative high pricing in the $0.85-0.90/lb region.

Low carbon ferro-chrome has been trading at prices in the range of $1.75-1.80/lb for much of June but there was also an increase in prices towards the end of the month above $1.80/lb.

However the spot high carbon ferro-alloy market in the second half of the month stayed in the high $0.70s to low $0.80s (up from mid $0.70s in early June), and was not making the mark targeted by some suppliers. Following the benchmark settlement, though, offers in the spot market shot up again for all types of high carbon material, which ended the month priced in the $0.80-0.87/lb range. Indian HC ferro-chrome (Si 4%) was offered at $ 0.80-85/lb CIF China at the end of the month. In the domestic Indian market ex-works prices had risen to INR 46,000-48,000/tonne ($960-1,000/tonne) by the end of the month, up INR2,000/tonne.

The rising costs of imported ferro-chrome have tempted some Chinese producers to restart production, although observers said the country's production is still comparatively high cost and is disadvantaged by rising energy prices and the lack of domestic raw materials base.

Towards the end of June ex-works prices for locally produced high carbon ferro-chrome reached Rmb 6,500-6,800/tonne ($0.86-0.90/lb Cr), up from Rmb 6,300-6,600/tonne seen earlier in the month. Some bullish market sources expected the price to breach Rmb 7,000/tonne ($0.93/lb) soon.

With the combination of western steel mills entering their summer maintenance season and South African producers at the height of winter season and energy prices (up by more than half overall), there are likely to be more cutbacks in western production. Samancor has indicated that it may switch off furnaces again after having restarted 70% of capacity, and Hernic Ferro-Chrome has indicated it may also rethink its production. Xstrata, which has already been running at 20% of capacity, did not seem affected as much by the energy tariff hike. However a localised union strike resulted in a shutdown at one of the two furnaces still running at its Lion smelter towards the end of the month.

However in Russia, mining and steel group Mechel said it has recommissioned all four furnaces at its 148,000 tpy Tikhvin smelter, to meet increasing demand. The smelter has been operating at a heavily reduced rate since the fourth quarter of last year.

In the United States, the spot price of high carbon ferro-chrome showed brief signs of a recovery on renewed consumer buying during June.

The ferro-alloy edged higher as some stainless steel mills dipped into the spot market to cover material and production cutbacks tighten supplies.

However prices remained in a range of $0.69 to $0.78/lb as the month ended as stainless steel mills retreated back to the sidelines and trade sources reported extremely thin trading volumes.

Low-carbon 0.10% C ferro-chrome also edged up to a range of $1.90 to $1.95/lb delivered during the month, while 0.05% C material held at $2.10 to $2.20/lb.

Stainless steel output in the Americas rose by 10.2% in the first quarter of this year to 411,000 tonnes compared with 373,000 tonnes in the fourth quarter, the International Stainless Steel Forum reported during the month.

NOBLE ALLOYS

Noble alloys, though from a much lower base than this time last year posted some significant gains in June, with the finger for the most part being pointed at inter-trade business and tighter vanadium supplies. European ferro-vanadium prices went up by 23.5% in the course of the month.

Ferro-niobium was more or less stable during June as traders also struggled to get their hands on supplies. The spot market for ferro-niobium in Europe finished the month at $38.50-39.50/kg.

Molybdenum has continued to benefit from arbitrage to China, which remains a net importer. European duty paid prices for ferro-molybdenum rose by 9.6% on average in the course of June, with similar gains in prices of molybdenum oxide.

FERRO-VANADIUM

The sudden impact of tighter supply was felt in European ferro-vanadium prices, which increased 23.5% to $24.50-25.50/kg while prices for the raw material, vanadium pentoxide, rose 25.7% to $5-6/lb, as the month drew to a close.

Market sentiment was boosted by the announcement by Japan's state-owned Japan Oil, Gas and Metals National Corporation (JOGMEC) that is was looking to buy 319 tonnes of ferro-vanadium for the national stockpile.

In the US spot market, June also marked a moderate resurgence in ferro-vanadium prices, which crossed decisively back above the $9/lb level early in the month after being mostly below that level for more than three months.

US spot-prices for ferro-vanadium by the final week of June had increased to a range of $9.20-9.60/lb for commercially significant quantities delivered to the customer. As the month closed, prices were being pressured higher on low end of that range. Prices bottomed out at levels as low as $7.75/lb in late April and early May of this year.

In China vanadium prices also pared losses and stabilised towards the end of June, in a range of Rmb 94,000-97,000/tonne ($27.57-28.45/kg V before 20% export tax). Vanadium pentoxide, similarly went up by Pmb1,000/tonne to Rmb 87,000-89,000/tonne ($5.91-6.04/lb before 5% export tax) in June and have continued to move upwards in the beginning of July, taking the market above $6/lb.

Indian domestic prices for ferro-vanadium has been rising steadily since May and stabilised in the second half of June at INR 1100- 1200/ kg ($22.70-24.78/kg) for FeV50%.

Demand from steel mills is still slow, however the market is supported by tight availability and relatively high cost of vanadium pentoxide.

Meanwhile South Korea this month revised its national reserve plan, raising its requirement for base and minor metals by 6% for 2009.

This includes a requirement to buy 496 tonnes of vanadium, up from a previously estimated 360 tonnes.

Meanwhile JOGMRC, mentioned above, postponed its purchase of 319 tonnes of ferro-vanadium having failed to obtain a satisfactory price by the close of the tender on 30 June. Two companies offered prices in he tender. JOGMEC was also tendering for 130 tonnes of cobalt metal, which it also ultimately decided not to purchase at this time because of high prices.

FERRO-MOLYBDENUM

US spot market prices for ferro-molybdenum delivered to the consumer pushed moderately higher throughout June, reaching a range early in the final week of the month of $10.40-11.00/lb. Prices two months earlier (in late April), were generally in a narrow range of $9.00-9.30/lb, by comparison.

US spot market prices for molybdenum oxide, which had steadily climbed since mid-April, appeared to level off somewhat in June. Prices nevertheless remain solidly above the $10/lb mark, on a delivered-works basis. By the final days of the month prices appear to have stabilised in a range of $10.20-10.40/lb.

US spot molybdenum oxide prices hit a low for the year to date of slightly below the $8/lb mark in mid-April.

After something of a lull, ferro-molybdenum prices in Europe found their climbing boots, moving up 9.6% to $26.50-27/kg, with a similar increase in prices of molybdenum trioxide, which ended June 9.5% higher at $10.80-11.20/lb.

Overall, worldwide molybdenum oxide prices have rebounded by approximately 30% since early April.

China's buying has been behind the rise, with domestic prices remaining significantly higher than overseas, leading the country to import both molybdenum oxide and ferro-molybdenum while its export business for molybdenum products remained negligible.

China imported 3,906 tonnes of molybdic oxide in May, pushing the five-month total to a record 21,577 tonnes. Imports for both oxide and concentrates totaled 26,397 tonnes in the first five months, according to latest Customs statistics.

From July 1 China reduced export taxes molybdenum oxides and hydrates, ammonium molybdate, molybdenum powder and unwrought molybdenum metal from 10-15% to 5%. This however is yet to have an impact on the market.

At the end of June China also allocated its second batch of export quota for the remainder of the year for primary molybdenum products, including ferro-molybdenum, roasted molybdenum concentrates (molybdic oxide) and unroasted molybdenum concentrates.

A total of 13,541 tonnes has been awarded to 15 licensed companies, compared to 20,310 tonnes and 14 licensed companies in the first batch of allocation of 2009. For details see:

However, China's actual exports in the first five months of the year were only 2,368 tonnes for roasted molybdenum concentrates (molybdic oxide) and unroasted molybdenum concentrates and 547 mt of ferro-molybdenum, according to Customs data.

In the domestic Chinese market, prices for locally produced molybdenum concentrates (45% Mo) and molybdic oxide (51% Mo) were steady in June at Rmb 1,750-1,800/mtu ($11.64-11.98/lb) and Rmb 1,800-1,850/mtu ($11.98-12.31/lb respectively. Imported molybdic oxide was being offered at $ 10.50-10.70/lb CIF.

Prices for 60% min grade ferro-molybdenum also settled into a stable range by mid-June of Rmb 118,000-120,000/tonne ($28.84-29.33/kg Mo before 20% export tax). The 20% export tax on ferro-molybdenum remains in place in July, respite the reduction in taxes on some molybdenum products.

In India, domestic ferro-molybdenum prices have stabilised at INR1,200-1,300/kg ($24.91-27/kg) in June, with limited availability of molybdenum oxide supporting pries of the ferro-alloy against weak demand.

Domestic prices for molybdenum oxide have held steady at INR435-465/lb, and prices for both the oxide and the ferro-alloy are expected to remain stable in the coming month.

FERRO-TUNGSTEN

As the steel industry gears up for the traditionally quiet summer period, there was little change in ferro-tungsten prices in Europe, which dipped slightly as the month ended to 24.50-25.50/kg and no change in APT prices that have remained at $180-185/mtu since the start of May.

In China, prices for ferro-tungsten firmed up mid-month on the back of the tight raw material supplies, but business for the ferro-alloy remained thin in both the domestic and export markets.

Domestic prices for 75%min ferro-tungsten settled into a stable range of Rmb 107,000-117,000/tonne ($15.68-17.15/kg) in the second half of June.

In line with firmer domestic prices, traders raised their export offers for ferro-tungsten from $ 25-26/kg in the earlier art of June to $ 25.50-26/kg towards the end of the month.

FERRO-TITANIUM

Ferro-titanium has been squeezed by a drop in demand and pressure on prices from the steel industry and the rising cost of scrap on the other.

After a brief rally in April, the market stayed on a downward trend, however towards the end of June there were signs that it could take no more battering, as producers began contemplating cutbacks rather than selling at rock-bottom prices.

Prices in warehouse duty-unpaid, that were dragging along at $3.35-3.50 in early June started firming up in the cost of the month as cheaper material was gradually sucked out of the market. The threat of old Russian stocks being released into the market and depressing prices further in the wake of producer VSMPO's arbitration with its former agent has also receded as more details emerged. Sales documents for the metal which will be auctioned in Rotterdam in July showed that it is largely low quality or damaged, and market sources said it would not have much of an impact in the market.

Faced with rising scrap prices, with Titanium 6-4 alloy turnings going from below 45 cents to closer to 50 cents/lb, Uk producers have been refusing to sell ferro-titaium 70 below $2.50/kg. In the later part of the month ex-works business was reported at $2.60-2.65/kg and prices seen heading closer to $2.70/kg.

The closure of the aluminium alloys business of one of UK's larger producers F.E.Mottram also hit market sentiment. There is now a lot of uncertainty in the market about sustainability of ferro-titanium production, in the light of both raw material shortage and barely break-even market prices for the ferro-alloy. Producers have been running at reduced capacity for long periods of the year to date and any return to full capacity seems to result at the moment in a build up of stocks. With the western market now entering its slowest period, market confitions are not getting any easier.

However there has been some sings of resurgence in interest from traders, some of whom have all but abandoned the market in recent months. Generally this year business has tended to be dominated by direct producer-customer business, causing many traders to withdraw from the market.

RARE EARTHS

The rare earth metal markets have been generally slow in June although praesodymium-neodymium prices have started to edge up at the end of the month.

In the last days of June China authorised more companies to export rare earths, and published export quotas for the second half of the year. These can be found here:

PRASEODYMIUM/NEODYMIUM

Prices for praseodymium/neodymium oxide have been holding relatively stable at about Rmb63,000-64,000/tonne ($10,626-10,795/tonne) in the earlier part of the month as some suppliers were no longer willing to accept lower prices of Rmb60,000-62,000/tonne ($10,120-10,457/tonne) to attract buyers.

However, mid-month most suppliers in China increased their prices to about Rmb65,000/tonne ($10,963/tonne) for the 99% min rare earth oxide and prices have been holding at this level in the following week. Prices have moved further up towards the end of the month to around Rmb66,000/tonne ($11,132/tonne) as suppliers have been reluctant to sell their material.

In the meantime, prices for 99% min praseodymium/neodymium metal have been steady at Rmb92,000-94,000/tonne ($16,867-17,234/tonne) in the later part of the month, compared to Rmb91,000-93,000/tonne ($16,684-17,050/tonne) seen in the earlier part of the month.

DYSPROSIUM

Dysprosium oxide prices have been holding stable at either side of Rmb540/kg ($99/kg) in the earlier part of June, with business just ticking over. However prices for the 99% oxide have appeared to nudge up in later part of the month and some suppliers would not sell the rare earth oxide at less than Rmb550/kg ($101/kg), although there has been little improvement seen in downstream demand.

Meanwhile, prices for ferro-dysprosium (Dy 80%) have also increased to about Rmb590-600/kg ($104-106/kg) in the second half of the month from around Rmb580/kg ($102/kg) seen in the first two weeks of June.

LANTHANUM/CERIUM

Lanthanum/cerium chloride (La 35%, Ce 65%) prices have moved down to Rmb 4,700-4,800/tonne ($792-809/tonne) in mid-June from the Rmb 4,800-4,900/tonne ($809-826/tonne) range seen at the start of the month. Prices for lanthanum/cerium mischemtal have been holding relatively stable at about Rmb27,000/tonne ($4,950/tonne) in recent weeks.

EUROPIUM

Europium oxide prices saw little improvement in June, although many market participants had been expecting prices for the rare earth oxide to rise on the back of the recent reduction in domestic supply.

Transactions for 99.9% europium oxide continued to be reported at either side of Rmb 2,500/kg ($458/kg), similar to prices seen in May.

CERIUM

There has been little price movement in the cerium market over the past month, with demand and supply relatively well balanced.

Market players reported that prices for 99% min cerium oxide have been holding at about Rmb 15,000/tonne ($2,528/tonne), similar to prices seen in May. Prices for 99% min cerium metal have also been stable, in the range of Rmb 33,000-34,000/tonne ($6,045-6,228/tonne) over the past month, supported by the steady prices of cerium oxide.`

YTTRIUM

The Chinese yttrium market has continued to see a lack of consumer purchases over the past few weeks, although some suppliers have been holding their prices steady.

Market sources reported that prices for 5N yttrium oxide have remained in the range of Rmb 45,000-46,000/tonne ($8,246-8,429/tonne), similar to prices seen in the earlier part of this month. However lower prices of about Rmb 43,000/tonne ($7,879/tonne) for the rare earth oxide have also been visible. Suppliers have been maintaining prices for 3N yttrium metal at either side of Rmb 200/kg ($36.65/kg), equivalent to prices seen in the past few months.