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Chinese domestic prices of ferroalloys fall gradually

Being stimulated by the provisional active demand for ferroalloys from domestic market, prices of Chinese ferroalloys were once offered at higher levels since the end of last year but, at present time when it has passed one month after Lunar New Year was over, these risen prices of Chinese ferroalloys have finally turned to fall into a slump. In view of the fact that market price of manganese ore as raw material has been definitely reduced by 65%, domestic prices of Chinese manganese ferroalloys are in the mood to fall by USD 50 per tonne during a period of last week to this week.

However, on the other hand, the Central Government of China has arranged a temporary reduction of electric power fee from December of 2008 but this arrangement ceases by the March 15th of 2009. Therefore, the cost to produce silicon based ferroalloys, such as ferrosilicon, in China will raise again. This temporary reduction of electric power fee arranged from December of 2008 is to cut by CNY0.08 per 1 KWH and, accordingly, it was informed that electric power fee has come down to CNY0.52 per 1 KWH on the average as a whole of China. It is a general view at present that China is anticipated to produce crude steel in 2009 on a similar scale to that produced in 2008. The output of crude steel in China for January of 2009 turned to increase after an interval of several months but, on the other hand, an influential analyst in Australia has a severe forecast that China will have to reduce their crude steel production in 2009 by 12.2% from that in 2008. Therefore, there are various opinions in relation to an anticipation of crude steel production in China for 2009.

The factor to shake market prices or export prices of Chinese ferroalloys is the excessive and large quantities of manganese and silicon ferroalloys stocked by Japanese distributors. Consequently, the negotiations to export Chinese ferroalloys for Japan have come to a standstill and new contracts are nearly nothing to conclude at present. Market prices of bulk ferroalloys are being sporadically offered from China but these prices are thought to have less offered from Chinese side are USD 1,350 to USD 1,400 for silico manganese, USD 1,100 to USD 1,150 for ferrosilicon and USD 2,300 to USD 2,350 for electrolytic manganese metal.

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