Viewpoint: US minor metal outlook mixed
Pending trade cases and steady demand are expected to lift silicon prices in the second half of 2017. Superalloy and offshore battery demand are forecast to send cobalt prices higher. Meanwhile, electrolytic manganese metal prices are expected to move down in step with a weaker Chinese market.
Silicon
Market participants project increased demand from secondary aluminum alloy producers for the remainder of the year. Greater demand is expected to be mostly offset by less availability in the second half, forcing consumers to rely as much as possible on obsolete scrap. US suppliers and consumers forecast a gradual restricting of offers as trade case decisions approach in the fourth quarter. Supplies, in particular among those importing from nations under antidumping investigations, are projected to tighten through this period. This is due to a combination of fewer offers and lower imports.
US market participants widely expect silicon (Si 98.5pc) prices to increase by as much as 10pc by the end of the year, reflecting steady demand and progressively tighter stocks.
Silicon metal prices rose by 16pc to $1.16-1.19/lb at the end of the first half from the lows in February. Recent trade case delays and firm demand lifted prices by the quickest pace since early June.
Cobalt
Domestic superalloy and nickel-cobalt alloy demand are projected to outpace cobalt supplies in the second half of this year. Alloy producers are expected to supplement existing inventories and annual-contract allotments with consistent, 1-10t spot market orders. Rising consumption of cobalt raw materials for lithium-ion battery production, particularly in China, in combination with strong demand from aerospace markets will leave US suppliers with limited excess inventory. Demand is expected to peak between September-November, despite efforts by alloy producers and consumers to reduce the share and impact of higher cobalt prices in end-products.
Market participants anticipate prices to increase by 20-24pc by the end of the year. Gains are expected to escalate in the late third and early fourth quarters as end-of-year purchases hit inventory-short suppliers.
Cobalt (99.8pc) prices climbed by 84pc in the first quarter, slowing to 6pc growth in the second quarter. Prices topped $28.50-30.25/lb at the end of June.
Manganese
Falling prices for Chinese electrolytic manganese metal are projected to undercut the US market in the second half. Lower import prices will encourage carbon and stainless steel mills to reduce bids, with suppliers following suit. Market participants anticipate ore prices to move down in the second half, contributing to weaker metal prices. As a result, abundant lower-cost metal in the US is expected to outweigh comparatively steady demand from consumers over the period.
Electrolytic manganese metal (Mn 99.7pc) prices are forecast to drop by 5-8pc in the second half of the year. Declines are expected to continue early in the third quarter before stabilizing with the Chinese market.
Year to date, prices for the metal have declined by 21pc to a low of $0.98-1.01/lb at the end of June. Falling import prices pressured offers down gradually before dropping more sharply in late June as traders sought to secure sales before further declines.
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US southbound barge demand falls off earlier than usual
US southbound barge demand falls off earlier than usual
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US Fed signals rates likely to stay high for longer
US Fed signals rates likely to stay high for longer
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New US rule may let some shippers swap railroads
New US rule may let some shippers swap railroads
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