[Ferro-alloys.com]Chinese low-priced ferro-silicon via a roundabout route has increased in the ferro-silicon markets in the respective Asian countries, and continued to expand its share. Although the Japanese import statistics showed its share in CY2012 was around 14%, it has been raised to about 19% in the former half of 2013 and up to more than 23% in the latest statistics for the period from January to November. And, the share is anticipated to expand further in 2014.

 

The Table 1 attached herewith shows there is a big difference between the volumes of ferro-silicon imported by respective countries such as Japan in the Asian region and the volumes exported by China. This is more than the volume which arises from the time lag between loading and discharging, which is thought to be the ones imported without regular export procedures from China. Besides, there are also customs clearances for the materials from the third countries which do not produce export-oriented ferro-silicon, which is thought to be Chinese ferro-silicon imported via the third country. The combined volume of these 2 kinds is roundabout products calculated based on the import statistics, which indicates a low-priced ferro-silicon called roundabout products via Vietnam. The import volume and share in the period from January to September in Japan, South Korea and Taiwan are shown in Table 2 below.

 

The biggest reason why this roundabout products are distributed is because China imposes a high export duty of 25% and there is a shipping route through the third country in order to avoid payment of export duty. Even if such negative points are considered as gray zone in legal aspects, instability of distributed volume, quality and size, the price being down by more than US$100 - US$150 per ton from the export through regular routs is lucrative for many of trading firms and steel mills, and therefore the inflow into respective countries in the Asian region has been increasing.

 

While the long-term contract for blast furnace mills which put importance on strict observance of compliance consists mostly of products regularly exported from China, roundabout products go into a spot market in most cases. The market watchers consider that, as far as the volume in the spot market for being the total import volume minus long-term portion is concerned, the roundabout products account for majority. (Source-wise share in the period from January to November in Japan and South Korea is shown in Tables 3 & 4 below.) 

 

For a reference, on December 11 last year, the Ministry of Finance of China announced the export duty on ferroalloy for 2014 won't be altered, which resulted in the price advantage of roundabout products being maintained this year, too. Therefore, the market share is anticipated to further increase, and some market watchers point out the possibility that the share in the spot market will exceed two thirds.