September 08, 2008

Chinese ferroalloy price to increase on removal preferential power rate

China’s National Development and Reform Commission, Ministry of Finance and the State Electricity Regulatory Commission have jointly announced removal of preferential power rate policy for ferroalloy industry from October 20th 2007. They also stressed provinces such as Sichuan and Hubei must cancel preferential power rate policy for ferroalloy industry immediately.

Besides ferroalloy producers, traders are also deeply concerned about the implementation. They fear that power rate hikes will drive up prices for ferroalloy products, which will directly affect their purchase prices and quotations.

As the policy is implemented differently in various regions, some producers now maintain prices as they have not witnessed power rate advances. However, power rate adjustment will come inevitably. Some producers have raised quotations and the rest are likely to follow.

SiMn price has surpassed CNY 9,000 per tonnes and is expected to break CNY 10,000 per tonnes, driven by Mn ore price rises and power rate hikes.

(Sourced from MySteel.net)