2020 PREVIEW: Reduced long-term contract volumes to increase spot ferro-alloys trading

Consumers are committing to lower volumes in long-term ferro-alloys contracts for 2020 compared with last year, according to market sources, creating the conditions for a busier spot market.

But tightening ferro-chrome supply has also sparked concerns about over-reliance on the spot market, market sources said.
Long-term contracts for ferro-alloys are usually settled against Fastmarkets' European benchmark price assessments, with the parties agreeing to a discount or a premium to the published price to take prevailing market fundamentals into account.
But the lower interest in long-term contracts this year is leading some suppliers to commit more of their material to the spot market, market sources said.
"There was no rush with long-term contracts with buyers not knowing how much material they will need for next year," a ferro-vanadium supplier source in Europe said late in 2019.
"More consumers are preferring to work on a spot basis, unsure about the economy's outlook... with [the United States-China] trade war in particular creating uncertainty," a ferro-tungsten trader source in Europe added.

Waning economic and steel production growth as well as a looming...


Ewa Manthey

Jon Stibbs

January 06, 2020

07:30 GMT