Monday, October 25, 2021

Demand uncertainty may upend EU bulk alloy price rally - Argus Media

Last updated Tuesday, October 12, 2021 06:34 ET , Source: NewsService

An uncertain demand outlook threatens to upend the ongoing price rally in Europe's bulk alloy market, with some traders unsure whether to take the risk of booking more forward shipments while regional steelmakers grapple with soaring energy costs and multiple headwinds further downstream.

Prices for silico-manganese, ferro-manganese and ferro-silicon have climbed rapidly this year amid tight supply and high freight costs, all registering triple-digit growth since January. Ferro-silicon's rally has been particularly sharp, hitting a record high of 1,700-1,760/t ddp on 15 June before more than doubling again to 3,800-3,900/t ddp on 7 October.

But going forward, the outlook for demand and therefore prices appears less bullish. Industry association Eurofer last week noted multiple headwinds affecting steel demand, as consumer spending power and inflationary pressure affected buying, according to director of market analysis Alessandro Sciamarelli.

Supply bottlenecks are also disrupting mills, as are high shipping costs. And Europe's energy crisis is putting some smaller mills in a precarious position financially, where idling furnaces can become more cost-effective than adding energy surcharges or raising offers.

A growing number of European ferro-alloy traders are voicing concerns about the demand outlook. Spot demand in particular may come under pressure, as large stainless steel mills have been locking in larger volumes of alloy than normal under long-term contracts in an...

Read Full Story: https://www.argusmedia.com/en/news/2262674-demand-uncertainty-may-upend-eu-bulk-alloy-price-rally

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