Looking for a ray of sunshine

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Minor metals traders looking for a ray of sunshine found at least a little in forecasts issued by the Organization for Economic Cooperation and Development (OECD) in November.

The OECD doubled its growth forecast for the leading developed economies next year, predicting a pick-up in pace in 2011, with China expecting to lead a global recovery.

The economy of the group’s 30 member countries will grow 1.9% next year and 2.5% in 2011, the OECD said. Output will shrink 3.5% this year. In June, the organisation put 2010 growth at 0.7%.

“After the New Year it will definitely get a little bit better,” a molybdenum trader forecast.

That optimism was tempered by Dominique Strauss-Kahn, the head of the International Monetary Fund (IMF) warned state support for the world's battered economies must remain in place if a smooth recovery is to be achieved.
Some European steelmakers are reportedly shutting down early around December 14, meaning they will be closed for three to four weeks.

But in Brazil some automakers may be asking staff to work over the Christmas period, contrasting sharply to the extended layoffs this time last year in response to the onset of the global economic slowdown.

US demand for ferro-alloys has been muted since late in the third quarter, and spot market sales have been particularly anemic for certain alloys such as ferro-molybdenum and ferro-vanadium as overall steel production in North America declined.

The steel demand picture in North America thus may help to explain the relative thinness of ferro-alloy spot markets in the region, particularly in relation to the European market.

Spot US prices for a number of ferro-alloys, notably ferro-molybdenum and ferro-vanadium, have typically lagged European prices, and US price movements in general have been more muted in recent quarters.

Trading conditions for manganese buyers in China got just that little bit tougher too in November. Alloy prices edged up in tight market conditions, driven particularly by higher electricity costs.

ANTIMONY

Antimony prices fell through the month back to levels close to those prior to the fatal accident at the South Mine of Twinkling Star in Hsikwangshan on October 8.  Business in the spot market has been sporadic with recent consumer sales of grade two material reported at $6,150/tonne and just over $6,200 basis Rotterdam.

Material on the ground in Rotterdam is said to be available at $6,000/tonne “and probably lower with a bid” a trader said, though quantities are limited.

Offers from China are said to be around $5,850-5,900/tonne CIF, but not expected to fall much further as traders and consumers secure material for the beginning of the year prior to the Chinese New Year holiday starting on 14 February.

It is expected that less evident business will be seen in the market next year, as one major consumer plans to set up consignment stocks to cover its requirements and price material basis the spot market rather than using formula prices.

The antimony metal market in China continued to slip, with domestic prices diving to Rmb39,200-40,200/tonne ($5,756-5,903/tonne before 5% export duty) at the end of the month, down from Rmb42,500-43,500/tonne ($6,240-6,387/tonne before 5% export duty) at the beginning of the month.
 
Export prices continued falling to $6,050-6,150/tonne FOB, having stood at $6,400-6,500/tonne FOB earlier in the month.
 
Along with the price decline for antimony metal prices, domestic prices for 99.5% grade antimony trioxide fell to Rmb36,500-37,500/tonne ($5,359-5,506/tonne before 5% export duty) later in the month, compared with Rmb38,800-39,800/tonne ($5,697-5,844/tonne before 5% export duty) seen at the start the month.
 
Export prices accordingly declined to $5,600-5,800/tonne, down from $5,800-5,900/tonne FOB.

BISMUTH

Enquiries are reported to have picked up both in China and for export in the last week after a dull month in which prices softened.

Export enquiries returned to the market from overseas buyers who had been postponing purchasing material over past weeks due to the continuous decline in prices.

FOB prices have moved up to $7.80/lb from $7.50/lb and some Chinese suppliers expect them to move higher as stocks are replenished for the New Year.

The sale of a 5 tonne parcel in Europe at $8.60/lb was reported at the end of the month.

The Chinese bismuth market in November experienced a lack of consumer buying. 4N bismuth ingot prices decreased to around Rmb100,000/tonne*$6.66/lb} in mid-November from Rmb113,000/tonne ($7.52/lb) seen at the start of the month.

However, market prices saw a visible rebound in the latter part of November. Many producers raised prices for the 4N ingot to Rmb108,000-109,000/tonne ($7.19-7.26/lb) and were reluctant to sell the metal in larger quantities.

Some sources suggested speculation as one of main factors behind the recent rise in bismuth prices.

CADMIUM

Activity in the cadmium market lessened noticeably through the month taking prices with it. Prices for 3N5 material are nominally at $1.60-1.65/lb - down from $1.76-1.90 at the beginning of the month and for 4N they were $1.65-1.75/lb having dropped from a high of $1.90-1.95/lb.

Recently China was reported to be paying $1.70/lb CIF for 4N material and bids for 3N5 were around $1.60/lb.

COBALT

The cobalt market turned around quickly in late October, as prices around $15/lb flushed out consumer and speculative buying, and in November spot prices returned to levels above $20/lb, last seen a year ago.

Through much of November, prices for 99.3% Russian grade metal stabilised around $20.50/lb, with 99.8% grade metal trading at least $1/lb higher.

The most spot business was reported in the US for Falconbridge material at $23.50/lb. Falconbridge and Sherritt material, which are substituting the shortfall in Inco production due to strike at its Sudbury operations, continued to trade at a premium.

In late October, China's largest producer Jinchian Group forecast a 3,000 tonnes deficit in the cobalt market this year. In the first week of November it hiked its website cobalt price by Rmb 20,000/tonne to Rmb370,000/tonne ($24.63/lb) for 99.8% cobalt metal, up from the quotation of Rmb350,000/tonne which had been in place since August.

Jinchuan's offer price for the plate shaped cobalt also went up by Rmb 20,000/tonne to Rmb368,500/tonne ($24.53/lb).

However, prices for downstream products, including cobalt chemicals, have not seen a proportionate increase, which has capped prices for the metal. Purchasing also were very hand to mouth, with buyers looking for prompt delivery, according to traders, resulting in a backwardation in cobalt prices.

November also saw the first long-term contract priced on a formula incorporating LME pricing, between Votorantim, the Brazilian producer of Tocantins brand cobalt and trader LN Metals for next year's deliveries. Notably, LME broker Standard Bank also set up a cobalt trading desk in November.

Kazakhstan's mining major ENRC completed its takeover of CAMEC, while securing the supply of concentrates from the DRC has enabled Zambian producer Chambishi Metals, majority owned by ENRC's founding shareholders, to restart production in November.

After Jinchuan’s move Chinese market demand saw few improving signs and prices appeared to move down in the latter part of November.

Prices for cobalt chloride declined to Rmb70,000-72,000/tonne ($10,274-10,567/tonne) and cobalt oxide fell to about Rmb230/kg ($33.76/kg before 10% export duty) from the previous basis of around Rmb240/kg ($35.22/kg before 10% export duty).

At the same time, prices for cobalt sulphate grading 20% cobalt content also moved down to about Rmb60,000/tonne ($8,806/tonne) towards the end of the month from Rmb63,000-65,000/tonne ($9,246-9,540/tonne) seen in mid- November.
 
GERMANIUM

The Chinese germanium market saw no price improvements in November, amid continuously weakening demand.

Prices for 4N germanium metal held at Rmb6,100-6,200/kg ($857-871/kg, including 5% export tax rebate) and Rmb3,400-3,700/kg ($499-543/kg before 5% export duty) for 5N germanium dioxide.

Sources reported lower export prices of $820-830/kg for the minor metal, although some domestic producers held offer prices at about $880/kg.

INDIUM

The indium market seemed to find a bottom by the end of the month, with offers in the low $400s becoming harder to obtain and, if available, only for small quantities. Traders reported they are now having to pay in the range $430-460/kg for spot material and consumer sales are in the upper $400s.
The Japanese were not in evidence in the spot market a normal requirement to move the market up by any significant amount. However, there are reports Japanese ITO manufacturers have been negotiating LTCs for the first quarter of 2010, with one producer only covering half of its requirements under a LTC and deciding to cover the balance in the spot market.
Enquiries from South Korea and Taiwan were also reported in the market in the latter part of the month.
The Chinese indium market in November was quiet. Prices for 4N indium ingot stayed at around Rmb2,900/kg ($426/kg before 5% export duty) in the earlier part of the month, while in the following weeks prices gradually moved down.

Prices remained at Rmb2,700-2,750/kg ($396-404/kg before 5% export duty) later in the month. Export prices also decreased to $420-430/kg in late November.

MANGANESE

The European manganese flake market jumped more than 5%, or $150, in the last week of the month on increased offers from China, the world’s key supplier, as well as tight availability within Europe.

European spot prices were at $2,650-2,700 a tonne basis in-warehouse Rotterdam, depending on delivery terms, with scarce manganese lumps about $150 above that level.

Chinese exporters were offering manganese flakes for about $2,700 a tonne basis in-warehouse and around $2,850 a tonne for manganese lumps.

However, the amount of unsold manganese flakes in European warehouses is limited and there were virtually no manganese lumps available for prompt delivery in Europe.

Dealers said there was a similar trend in manganese briquettes, offered for around $2,500/tonne basis in-warehouse for delivery in the next couple of months.

SELENIUM

Selenium prices started firming up again in the latter part of the month as what had been price checking enquiries from China earlier in the month become serious buying enquiries. Early in the month the Chinese were looking to buy material at $22-23/lb which was unacceptable to western producers ,but as the month progressed so did their rate of buying ideas. Recent business was reported at $25.50/lb CIF China.

The selenium market continues to be tight due to limited raw material supplies, which are not expected to change and could become even tighter in 2010 if the possibility of further copper refining cuts becomes reality.
Signs of improving demand from the States have been reported and consumers in the Americas and the EU are looking to fix contracts for the first quarter 2010 to secure material.

The Chinese selenium market in the earlier half of November was characterised by weak demand. Prices for 98% selenium dioxide softened to Rmb310-320/kg ($45.50-46.97/kg) from Rmb350-360/kg ($51.37-52.84/kg) at the start of the month. 99.9% selenium powder prices, slipped  from the previous Rmb480-490/kg ($31.95-32.62/lb) to Rmb460-470/kg ($30.62-31.29/lb).

However, the market in the second half of the month showed improving signs, with prices for the dioxide firming up to about Rmb380/kg ($55.77/kg) and Rmb490-500/kg ($32.62-33.29/lb) for the powder.

SILICON

The European spot silicon market increased again on strong demand and tight availability, with consumers already booking New Year business at even stronger price levels.
Free market prices in standard secondary aluminium-grade (98.5% grade) (5-5-3) were at €1,700-1,750/tonne basis FCA (free on truck) basis duty delivered paid, up €25, while better grades of low iron content silicon (4-4-1) fetched a premium some €75-100/tonne above that, depending on tonnage and delivery.
Demand is strengthening and consumers are worried about tight supply from European and South American producers.

There is business being booked, for at least a €50 premium to the current spot price, for forward delivery through January, February and March of next year, and it is even difficult to get material beyond January.
 
The U.S. silicon market was buoyed during November as demand started to show signs of life and a major destocking cycle came to an end.
Business activity picked up slightly as some consumers looked to cover small amounts of nearby material.

The spot silicon price edged higher during the month and was holding in a range of $1.16 to $1.22/lb, as the market moved into December.

Business activity was slightly softer during the Thanksgiving holiday and this may roll into the traditionally slower December period as buyers look to rundown stocks for the year-end.

U.S. silicon producer Globe Specialty Metals announced during the month that it had formed a joint venture with Dow Corning at its metal facility in Alloy, West Virginia.

But trade sources said they did not expected it to have an immediate impact on the domestic silicon market.

Meanwhile, annual silicon contract discussions continue with reports of 2010 deals being settled around the $1.18 to $1.25/lb level, compared with 2009 contracts there reportedly settled between $1.35 to $1.45/lb.

TELLURIUM

The tellurium market in November remained steady, supported by balanced supply and demand. Prices for the 4N ingot have been holding either side of Rmb1,150/kg ($169/kg), and prices for some small parcels were reported at Rmb1,180-1,200/kg ($173-176/kg).

TUNGSTEN

Miners in China withheld material aiming for higher prices, forcing tungsten concentrates prices to rebound slightly later in November. It pushed up the prices for most tungsten products.

Prices for 65% grade wolframite inched up to Rmb67,000-69,000/tonne ($151-155/mtu) from Rmb66,000-68,000/tonne ($149-153/mtu) and prices for 65% grade scheelite to Rmb66,000-68,000/tonne ($149-153/mtu) from Rmb65,000-67,000/tonne ($146-153/mtu).
 
APT prices edged up to Rmb101,000-104,000/tonne ($167-172/mtu before 5% export duty) later in the month, from  Rmb100,000-103,000/tonne ($165-170/mtu before 5% export duty) in the previous first three weeks.

But the export market has remained dull, with prices hovering at  $187-192/mtu,without any improvement due to lack of overseas buyers.

Despite higher prices in China at the end of the month, existing APT material in European warehouses kept quotations in check. Prices closed unchanged since mid-September at $190-200/mtu.
 
The tungsten carbide market experienced rising prices, with material moving up to Rmb162-167/kg ($23.78-24.52/kg before 5% export duty) from Rmb158-163/kg ($23.20-23.93/kg before 5% export duty) earlier.
 
Export prices also rebounded to $25.2-26.2/kg from $25-26/kg as the month ended. Trade sources currently remain downbeat about the future.
 
BULK FERRO-ALLOYS

The European ferro-alloys market has stabilised after falling late last month, although market sentiment is worried about the vulnerability of prices as consumers look covered for their raw material needs in the coming weeks.

Silico-manganese 65/17 grade spot prices are at €880-930/tonne basis delivered, while other ferro-alloys, such as high carbon ferro-manganese 75% material are at €870-920/tonne basis delivered works.

Medium carbon alloy is some €1,150-1,250/tonne, while low carbon material is at €1,350-1,400/tonne.
Business activity has been only sporadic recently and the spot market is seeing perhaps only a hundred or so tonnes either side of a total of 500 tonnes traded weekly.

Steel mills are not booking new business as they have virtually all of their needs covered in quarterly contracts.
Some European dealers have booked silico-manganese from Russia at some €850/tonne basis CIF Rotterdam recently, a sign taken that some suppliers are prepared to sell lower to bank some working capital in case prices fall further.
However, production discipline is expected to give support to prices, which should stem steeper losses, if any, through the rest of this quarter, dealers said.

FERRO-SILICON

The European ferro-silicon market has eased in the past few weeks against muted demand for prompt delivery, although the market has stronger support below the current price level on limited supply and availability.
Ferro-silicon prices are off €25 to €925-975 tonne basis duty delivered paid, depending on tonnage, grade and delivery.

Underlying consumption in the steel sector has strengthened in the second half of this year, although much of that usage has been restricted to quarterly settlements and running down existing stock in the current quarter.

The market was at a peak of €1,300/tonne last year. There have been a few cheaper deals done recently, although that seems to be mostly inter-merchant business this month. European producers have little or nothing to offer on the spot market as they say they have sold out of material, although it hasn’t really upset prompt trading, which has been minimal in line with demand.

FERRO-CHROME

November saw a spate of cutbacks in ferro-chrome production as demand and prices nosedived. With stainless steel output still 30% below capacity and western mills getting ready for the winter shutdowns, buying has largely petered out in the mature markets.

However at the end of November, the market began to rebound, as another spate of buying began in China, aided by the second economic stimulus pledged by the government.

Stainless steel has been the main beneficiary of the first stimulus package, which contributed to some 17% of China's annual stainless consumption.

While prices for charge chrome and Indian ferro-chrome into China were reported in the low to mid $70s/lb during November, by the end of the month, the CIF China market moved back over $0.80/lb.

Delivered prices for high carbon ferro-chrome in Europe slipped from a range of $0.85-0.90/lb maintained in October to low $0.80s/lb in November after a tender by a large steelmaker was concluded at  $0.81/lb, and some spot business was reported below $0.80/lb, although prices began to recover at the end of the month.

South Africa's  second largest producer Samancor, which changed hands in November  with ownership passing from Kermas to its partner IMR, the founding shareholders of Kazakhstan's ENRC, was reported to have reduced production to 40-45% of capacity.

Assmang said it was shutting one ferro-chrome furnace at its Machadodorp works , and in Turkey, Eti Krom, part of Yildirim Group, reduced its output to 50% of capacity. It's Vargon Alloys plant in Sweden restarted at about 20% of its capacity to keep a furnace warm and generate hot water under its local contract obligations.

ETI Krom said earlier in the month that it has stopped offering chrome ore for export to China until prices for 42% grade lumpy return to at least $300/tonne CFR China.

Prices for 42% lumpy during the month fell to around $260/tonne, however by the end of the month, the Turkish producer achieved its benchmark price, with a sale of 10,000 tonnes to a large steelmaker reported.

Other market sources also confirmed achieving similar prices, and at the end of November the market for 42% lumpy stood at $270-300/tonne. Over the course of November, Chinese chrome ore stocks were estimated to have shrunk by some 300,000 tonnes from October levels of 2 million tonnes.

If ferro-chrome prices recover in December, higher ore prices could be seen at the turn of the year, supported by seasonal drop in production in Turkey, India and Albania.

The U.S. ferro-chrome market was largely unchanged during November, as most consumers were happy to sit on the sidelines and live off inventories.

Spot business for the remainder of the year is expected to remain slow as stainless steel mills run down stocks for year-end accounting purposes.
High carbon ferro-chrome sat in range of $0.86 to $0.90/lb delivered.

Despite demand waning, prices may not come under heavy downward pressure as the supply pipeline remains relatively tight, according to traders.
 
NOBLE ALLOYS

FERRO-MOLYBDENUM

Duty-paid ferro-molybdenum saw a month of fluctuating prices and once again unfulfilled expectations, after prices leapt from $25-26/kg to $27.50-28/kg in the first week of November.

Talk of prices breaching $30/kg was quickly extinguished, as demand sagged and thoughts began to turn to the first quarter of next year. Some steelmakers shunned deliveries for the first week of December in ahead of earlier shutdowns.

But just when it seemed traders might be able to put their feet up for the rest of the year, prices lifted again to close the month 6.9% higher, with some buyers said to be buying in ahead of higher prices in the New Year and scarcer than thought material about.

Molybdenum oxide also saw prices rise and fall, though not to the same extent as the alloy. Material was trading 1.8% at the end of November.

FERRO-TITANIUM

Scrap shortage continues to be the main issue in the ferro-titanium market, and would be even more so at the moment if consumer purchasing in Europe had not been winding down early for the December holidays.

High replacement costs have led UK smelters to dig in their heels on prices and at the end of November few were willing to sell below $4.50/kg ex works. Lack of good quality scrap has also been a problem for Russian producers, and several traders in Europe said customers have been rejecting Russian ferro-titanium due to high carbon content. Off-spec material continued to be offered in November at a significant discount.

After diving below $4/kg in October, standard grade ferro-titanium prices recovered over the  course of November to mid-September levels, although some lower offers of around $4.10/kg for Russian material were still visible in late November. However UK producers were reporting sales at around $4.40-4.45/kg and united in targeting $4.50/kg at the end of the month.

This is driven by costs more than demand, as prices for scrap have risen from $0.80-0.85/lb for turnings achievable in October to $0.90-0.95/lb delivered works from European suppliers and above $1/lb from the US - around $1.10/lb reported at the end of November. This put the cost of scrap close to October 2008 level whereas ferro-titanium prices, even at $4.20-4.40/kg in warehouse are still about $1/kg down in the same comparison. More problematic than the price of scrap is its shortage, with industry sources talking of empty scrap yards and shrinking circle of suppliers.

What is holding ferro-titanium back from returning to $5/kg mark is lack of demand, and most ferro-titanium producers, who were running between three-fifths and two thirds of capacity in November were resigned at the end of the month to building stocks in December and carrying them over into the new year. However if demand picks up next year, and the scrap shortage continues to constrain capacity, we could see another push upwards for ferro-titanium.

FERRO-VANADIUM

Duty-paid vanadium pentoxide continued to trade at least nominally at 6.70-7.40/lb in November, with no business reported, while to a lesser extent ferro-vanadium’s fortunes shadowed the molybdenum alloy, closing 1.1% higher at 23.50-24, after dipping below $23/kg.        

US spot ferro-vanadium prices were stuck for most of November in a nominal range of $11.50-11.80/lb delivered to the consumer. Prices for most of October and very early November were in a higher range of $11.75-12.50/lb, by comparison.

US spot metal prices for ferro-vanadium may be poised for further declines due to simultaneous demand softness in both the specialty steels and aerospace sectors. The latter accounts for a large percentage of US demand for vanadium for use in titanium-alloys.

FERRO-NIOBIUM

Ferro-niobium continued on its upward price curve, as free-market supplies became increasingly tighter. Material prices added 4.2% in November to reach 43.50/kg, although buyers appeared unwilling to dip much further into their pockets, despite offers at $44/kg.

FERRO-TUNGSTEN

Quiet trading characterised the European ferro-tungsten market in November, though prices did increase 2% to $25.50-26/kg.

RARE EARTHS

The rare earth market last month was relatively quiet. Praseodymium/neodymium prices decreased in the latter half of the month, after experiencing sharp increases in October and stabilising in early November.

Dysprosium prices fell slightly though lanthanum and cerium oxide markets were active with prices moving up.
 
PRASEODYMIUM / NEODYMIUM

Prices for 99% praseodymium/neodymium metal held at around Rmb145,000/tonne ($21,281/tonne before 25% export duty) in the earlier part of the month with 99% praseodymium/neodymium oxide at Rmb105,000/tonne ($15,411/tonne before 15% export duty).

However, the market saw little real activity as buyers were discouraged by high prices.
Lower prices of Rmb136,000-138,000/tonne ($19,960-20,254/tonne before 25% export duty) for 99% praseodymium/neodymium metal and Rmb95,000-96,000/tonne ($13,943-14,090/tonne before 15% export duty) for the oxide were seen mid-month, although many producers have been reluctant to lower prices to secure business.

CERIUM

Cerium oxide sales in November were reported as ‘smooth’. Prices for 99% cerium oxide have moved up to Rmb18,000-19,000/tonne ($2,642-2,789/tonne before 15% export duty) towards the end of November.

Many suppliers are offering Rmb20,000/tonne ($2,935/tonne before 15% export duty) for the rare earth oxide, while prices in the first half of the month were holding at about Rmb17,500/tonne ($2,568/tonne before 15% export duty).

DYSPROSIUM

Dysprosium prices edged up in the early part of November. Some suppliers raised offer prices for 99% dysprosium oxide to about Rmb620/kg ($91.0/kg before 25% export duty) and some parcels have been concluded at about Rmb615/kg ($90.3/kg before 25% export duty).

However, dysprosium oxide prices softened slightly in the second half of the month to around Rmb590/kg ($86.6/kg before 25% export duty). Trade sources said relatively weak downstream demand was cited as the main factors behind the dip in prices.

LANTHANUM

The Lanthanum market saw downstream demand active and prices firming up. Prices for 99% lanthanum oxide moved to Rmb27,000-28,000/tonne ($3,963-4,109/tonne before 15% export duty) in the latter part of November from Rmb25,000-26,000/tonne ($3,669-3,816/tonne before 15% export duty) earlier in November.

MEDIUM YTTRIUM AND RICH EUROPIUM RARE EARTH CONCENTRATES
 
At the end of the month medium yttrium and rich europium rare earth concentrates prices increased visibly in early November to Rmb61,000-62,000/tonne ($8,953-9,100/tonne before 15% export duty) on the back of previous weeks’ increase in praseodymium/neodymium prices.

However, prices for concentrate in late November softened to Rmb59,000-60,000/tonne ($8,659-8,806/tonne before 15% export duty), influenced by lack of downstream purchases caused by the weakening praseodymium/neodymium market.

RARE EARTH CARBONATE
 
The rare earth carbonate market saw tight domestic supplies in the first half of November. Prices surged  to as high as Rmb11,500/tonne ($1,688/tonne before 15% export duty). Many consumers were unable to obtain the carbonate even at higher prices.

But the market in the second half of November was quieter with buyers cautious about purchasing material due to the sluggish praseodymium/neodymium market.

Prices for the carbonate moved down to about Rmb11,000/tonne ($1,614/tonne before 15% export duty) as the month ended.