MINING and ferroalloy smelting group OM Holdings Ltd (OMH) has benefited from a surge in global ferrosilicon (FeSi) prices this year. But prices are likely to have peaked, its executive chairman and CEO Low Ngee Tong says, and the group is counting on stable rather than sudden spikes in prices to carry it forward.
Prices have surged this year mainly because of a global power crisis, especially in China, which added further pressure on current supply constraints for ferroalloys.
FeSi prices, which hit an unprecedented high of US$4,150 a tonne at end-September, have since fallen, says Low, citing data from price reporting agency S&P Global Platts.
Prices were trading in the range of US$2,000 to US$3,000 a tonne in November, and have since stabilised at the lower end of that range.
“It’s worth noting that this new-found equilibrium price is still higher than the last recorded historical high (between 2017 and 2018), and this is due to the increased cost of smelting in China, owing largely to changes in power costs after new policies and regulations were passed in the third quarter of 2020. It is, therefore, safe to say that prices have peaked, but we are hopeful that the new normal will further strengthen the fundamentals of smelting in Sarawak,” Low tells The Edge in an interview.
OMH is dual-listed on the Australian Securities Exchange (ASX) and Bursa Malaysia. It made its debut on the Main Market of Bursa on June 22.
Its share price jumped 79.1% over a span of three...
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