It was Christmas in May for the US silicomanganese market. However, while the buyers got presents under the tree suppliers only found coal. With over 30,000 tons on offer for the second half of 2018, there was lots of interest. Suppliers were boldly, but not wisely, predicting prices around 70¢, while buyers were at least 10¢ under that in their opinion. In the end, the mills won.
Much of the material was sold on a fixed-price basis, and in one case, all the material was purchased on a fixed price. Though some sellers tried to say the fixed prices are’t reflective of the market since so much is being delivered under formula contracts. Can anyone really believe that? I think that in 2019 contract negotiations considering the negativity surrounding the price indexes, there will be much more fixed price sold.
AND THE PRICES ARE.
Third quarter prices were between 60-63¢, with most of it sold in the 61-62¢ range. Most important, the prices are ddp, which means you have a to subtract 2-3¢ per lb usually.
The fourth-quarter prices were UNDER 60¢.
For those buyers with index contracts, that means they will be getting material below even cheaper once the discounts are taken into account. So, it might be reasonable to say silicomanganese is no higher 60¢ right now if the indexes reflect reality.