Ferrosilicon Market Jumps with Earthquake Impact

Ferrosilicon market surges with impact by major earthquake in Sichuan, China. Chinese suppliers now offer US$ 2,300-2,400 per tonne CIF Japan compared with US$ 1,700-1,800 level a week ago, according to Japanese sources. The supply concern increases in the market due to production trouble along with damage for transport and energy supply in China. The price level is expected to keep such high level for a while. Ferrosilicon price surges recently after the gradual increase to fill the price gap with silicomanganese, which already jumped earlier the year and was temporally US$ 1,000 per tonne higher than ferrosilicon. Ferrosilicon production in the quake area is just more than 10% of Chinese production. However, the supply concern spreads due to damage for power supply and logistics. The buyers’ inventory building activity also lifts the market. Some interests are cautious for major plunge under the overvalued market. However, the price is expected to be supported by supply concern including earthquake damage and potential output cut around Beijing during Olympic game under firm demand.