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Japan ferrochrome price rises as low offers disappear amid active trade

Tokyo — The S&P Global Platts CIF Japan ferrochrome price rose to $1.13-$1.20/lb CIF Japan Friday, from $1.10-$1.15/lb CIF Japan a week ago as offers as low as $1.10/lb were no longer heard amid active trade.

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One Japanese steelmaker bought 200-300 mt at around $1.13/lb CIF main Japanese port this week, for delivery over March-May.

An Indian producer reported a sale at $1.25/lb CIF Japan for a few container loads.

One Japanese trader said he bought at around $1.20/lb CIF Japan, but declined to elaborate further.

A second Japanese trader said he was offered $1.19/lb CIF Japan, while a third Japanese trader was offered $1.13/lb CIF Japan.

The deals and offers were for 10-50 mm lumps with 60%-65% chrome, maximum 8%-9% carbon, 8%-9% silicon, 0.03%-0.05% phosphorous and 0.05%-0.06% sulfur.

Another Japanese consumer bought over 200 mt of low-silicon material at $1.28-$1.29/lb CIF Japan, loading February or later, said two sources familiar with the deal.

Offers were $1.35-$1.40/lb CIF in Asia, one producer said two weeks ago. The consumer bought 10-50 mm lumps with minimum 65% chrome, maximum 2% silicon, 8%-9% carbon, the sources said.

Spot trade was active as Japanese consumers who have finalized April 2017-March 2018 production plans started to source for the upcoming quarter, traders said.

Three other steelmakers are expected to issue buy tenders this month, for April-June consumption, said sources.

Japanese market participants are closely monitoring the reorganization of Japanese specialty steelmakers as it may impact raw material supply flow.

Two stainless steelmakers Nippon Steel & Sumikin Stainless Steel Corp. (NSSC) and Nisshin Steel will merge next month, and JFE Bars & Strip's Sendai steelmaking plant will move to JFE Steel in April.

The mills are currently discussing optimization of their steel production facilities, that may lead to closure of some lines or furnaces. Decisions on raw material procurement have not been made yet, mill sources said.

"The stainless mills use mostly South African and Kazakhstan ferrochrome, on long-term contracts. It is a matter of spreading out the volume shares among the three producers who have contracts," said one trader.

JFE B&S Sendai plant has been buying ferrochrome via quarterly tenders, mostly from India. Meanwhile, JFE Steel sources from Kazakhstan and South Africa on contracts.

It was still uncertain whether JFE B&S will continue the quarterly tenders. The mill has not used Kazakhstan ferrochrome -- with higher chrome content but less iron -- but its furnace is capable of using Kazakh grade, said sources in the JFE group.

"The likely scenario is that the Sendai plant will be sustained and will inherit the work of JFE Steel. Raw material purchase means will depend on prices realized by spot tenders and term contracts, which is cheaper," said one source.

Elsewhere in Asia, one major steelmaker has closed January-March term contract at around $1.20/lb CIF for 10-50 mm lumps with minimum 60% chrome, maximum 8%-9% carbon, 3%-4% silicon. The volume is over 3,000 mt/month, sources said.

The 48%-52% charge chrome was assessed at $1.04-$1.30/lb CIF China Friday, unchanged from a week ago. The 58%-60% ferrochrome was assessed at $1.04-$1.15/lb CIF China this week, up from $1.04-$1.05/lb CIF a week ago.

Producers said they were not accepting Chinese buyers' bids at $1.04/lb CIF as sales to Japan and South Korea have closed 10-15 cents/lb higher in the past two weeks.

--Mayumi Watanabe, --Edited by Irene Tang,