US silicon offered at $1.37-1.38, f.o.b. duty paid

Correction: Silicon was offered in the US at $1.37-1.38 f.o.b. port, duty paid, not c.i.f.

Norsk Hydro may declare force majeure due to US sanctions

Hydro has notified Rusal it may be necessary to declare force majeure on certain contracts, as the company could be prevented from upholding its obligations due to the US sanctions list issued on April 6, at least from June 5. Hydro estimates the potential impact on its production and customers would not be significant, neither upstream nor downstream.

September FeSi contract takes command of ZCE

May is definitely out on the ZCE’s ferrosilicon contract. The May price fell rmb 22 to rmb 6,122 per mt today on 40,352 contracts, but the September contract rose rmb 18 to rmb 6,192 per mt on 148,950 contracts changing hands. The contango continued to widen.

However, the ZCE’s May silicomanganese contract was still favored, with prices falling rmb 4 to rmb 7,712 per mt on 48,214 contracts while the September contract price rose rmb 70 to rmb 7,430 per mt on 37,490 contracts.

Details of TMI’s involvement with Huarong

Last week, it was learned that Lai Xiaomin, party secretary and chairman of China Huarong Asset Management Co., Ltd., is under scrunity  due to “severe disciplinary breaches.”  The instigation, according to China Money Network, is tied to the company’s financial backing of a private electrolytic manganese manufacturer Ningxia Tianyuan Manganese Industry Co., Ltd.

Established in 2012, China Huarong is a state-owned non-banking financial institution approved by China’s State Council. The company was formerly known as China Huarong Asset Management Corporation, which was established in 1999 as one of China’s Big Four asset management companies (AMCs) tasked to manage China’s non-performing loans. Lai has been serving in his current positions since September 2012. News of the investigation came as China Huarong, which is already listed in Hong Kong, is preparing for a listing on the A-shares.

According to latest reports, China Huarong provided large amount of financing to Ningxia Tianyuan Manganese Industry without going through proper protocols, and sometimes violating regulations, to allegedly cover up its financial losses.

The report said China Huarong arranged a structured financing deal last September worth more than RMB20 billion ($3.12-billion) for the company, with about ten of its subsidiaries together providing RMB10 billion ($1.59-billion) in a junior tranche of capital, which was seen as an especially risky move.

In another case, a wholly owned subsidiary of one of China Huarong’s joint investment partners reportedly teamed up with two other investors to form a private equity fund, aiming to raise up to RMB20-billion to restructure a troubled property developer. The developer, despite defaulting on its bonds in recent years, was able to borrow several billion of RMB from China Huarong with little collateral. It turns out that Ningxia Tianyuan Manganese Industry holds a 16.39% stake in the restructuring deal through a subsidiary in China Huarong’s joint investment partner.

Other media also reported that in 2013, China Huarong provided liquidity to Tianyuan Manganese Industry via a trust loan as Huarong Trust established a trust plan worth of RMB1.03-billion ($163.4-million).

Also, China Tianyuan Financial Limited, the parent company of Tianyuan Manganese Industry, is the second largest shareholder of Huarong International financial Holdings Ltd, China Huarong’s licensed overseas-listed financial holding company. Huarong owns a 51% stake, while Tianyuan owns 18.01% of stake.

In 2014, China Huarong and Tianyuan Manganese Industry also co-founded Huarong Western Development Investment Ltd., which provides financial services for projects related to Belt and Road initiative. The two parties hold 60% and 40% of Huratong Western Development Investment’s stakes respectively.


Finnfjord signs new power agreement with Statkraft

Finnfjord has signed a new power contract with Statkraft to replace the current agreement that started in 2011. The contract runs between 2018 and 2031 for a total volume of 8.5 TWh, or 0.65 TWh annually.

TMI’s statement on its association with Huarong

Tianyuan released an statement today about its association with Huarong. Also attached is the original version in Chinese for those readers who understand Chinese.

I  Our company has always firmly safeguarded the authority of the Party Central Committee with Chairman Xi as the core and centralized leadership, fully implemented the decisions of the Party’s Nineteenth Congress, firmly supported the party’s central government policy of fighting corruption and building a clean government, and cooperated with the state in violation of laws and regulations. To investigate and punish behaviors so as to create a good political and business environment.

II  In the internet there is various unfair speculations of the relationship between our company and Huarong and our company’s many years of development:

1. Our company’s electrolytic manganese metal production capacity in 2014 reached 500,000 tons, and it is the world’s largest electrolytic metal manganese production enterprise. Its annual sales revenue is 47 billion yuan, ranking first in Ningxia private enterprises, and it is the top 500 private enterprises in the country in the same year. In 2017, our company’s sales revenue reached RMB 74 billion, ranking 66th among the top 500 private enterprises in the country. The above achievements cannot be separated from the help of the government and all sectors of the society, but also depend on the strength of our company and tens of thousands of staffs with their hard work for many years.

2. In response to the “One Belt and One Road” strategy proposed by the country, we have optimized the allocation of resources in the world, and realized the goal of becoming bigger and stronger. In 2015, our company began to cooperate with Huarong Company. By now, the total amount of cooperation between the two parties has reached 6.293 billion yuan (accounting for The ratio is less than 4% of the total assets of our company. The above funds are invested in the real industry.

3. In addition to normal business cooperation, Huarong does not participate in the company, has no control or management rights over our company, does not have voting rights over the company’s decisions, and the cooperation between the two parties always follows laws, regulations, national policies, and the rules and regulations of the two companies.

III. Our company welcomes supervision and guidance from all walks of life and friends of the media. We are fully aware that “bitter medicine is good for health and faithfull suggestions are not pleasant to one’s ears.” Regarding the negative comments on the network, we welcome the investigation and supervision of friends from the media, but also urge media friends to report it truthfully!

IV Thank all friends from all walks of life who are concerned about our company! At present, the company’s production and business as usual. Just as China News broadcast of April 20, 2018 on our company’s efforts to assist Ningxia in accurately assisting the poor and make nearly 10,000 poor people get rid of poverty, continue to fulfill the party’s central task of accurately helping the poor and contribute to regional economic and social development.

V. Our company will reserve the right to further investigate the relevant media and individuals for their false statements and legal responsibilities!


Waiting for Godot

The US silicon market is waiting the arrival of metal shipped after the ITC no injury decision. While GSM is expected to make a bid deal about appealing—a no brainer—the real effect is nothing. The case would go to the Court of International Trade, which isn’t under anyone’s clock to make a decision. When it finally does, in most cases, it refers the case back to the ITC to see if any “adjustments” are needed. The ITC can say, no, and then GSM would probably appeal back to the CIT. The CIT would then study the matter—again no time clock—and possibly send it back to the ITC.

Remember, GSM would be fighting the US government and the ITC, which unanimously rejected GSM’s case.

As for material in transit, don’t worry, but also confirm this with your trade lawyers.

Low-price silicon metal offers go begging

It’s definitely a wait-and-see time in the US silicon market. Many buyers are on the sidelines to see what prices will be once silicon imports starting hitting the ports. Already, one producer was offering 137-138, c.i.f. port (duty paid), but with no takers. “The buyers don’t want to rush in considering they are sitting on inventory,” one seller said. “There’s a lot of BS in the market right now too about prices.”

New US silicon benchmark

Nothing is ever easy. When working on the new 5-5-3 US benchmark for silicon metal, it was complicated. While there was spot business, more than I originally thought, prices were all over the board, with consumers sticking with their traditional suppliers without much negotiation.

The other problem was the discounts off the indexes. The discounts were less in 2018 than in 2017, and some major suppliers maintaining they didn’t give any discounts. Well, yes and no. More than a few buyers got their PREMIUM material, not 5-5-3, flat, i.e., no discounts.

Therefore, to be accurate you would have to take into account the premium upcharge to compare apples to apples (I hate the phrase).

Also, the benchmark isn’t delivered, but c.i.f. or producing point.

With all that, the likelihood there will be an uptick, possibly a big one, for fixed-prices sales through 2018 is high. Many buyers are partially committed for the second half and may try to “play” the market rather than the passive index buying.

All Renova’s US dollar bank accounts blocked

All US dollar bank accounts of companies controlled by Renova have been blocked due to the US sanctions, according to the Swiss paper Finanz und Wirtschaft. Already, Viktor Vekselberg, the owner of Renova and its subsidiary Transalloys, had $1.5- to $2-billion in his assets frozen.

Meanwhile, Tass reported that  Russia’s Finance Minister Anton Siluanov met with US Secretary of the Treasury Steven Mnuchin on last Friday to discuss anti-Russian sanctions, according to the Russian Finance Ministry’s press service.

“On April 20, Russian Finance Minister Anton Siluanov met with US Secretary of the Treasury Steven Mnuchin on the sidelines of this year’s Spring Meetings of the International Monetary Fund and World Bank Group. During the meeting, the issue of sanctions was discussed,” the ministry said in a statement.

US Treasury said the meeting was held at Russia’s request.