In the first quarter of 2000 Ukrainian ferroalloy works revealed their intention to seize all the possible opportunities and to retain all their niches on the world ferroalloy market. Dynamic marketing policy, persistency in settling internal economic pro

FERROALLOYS

Vitaly GNATUSH, expert with DerzhZovnishInform

In the first quarter of 2000 Ukrainian ferroalloy works revealed their intention to seize all the possible opportunities and to retain all their niches on the world ferroalloy market. Dynamic marketing policy, persistency in settling internal economic problems, and strive towards coordinated activities are the new distinguishing traits of Ukrainian manufacturers and sellers of ferroalloys.

According to the data of Metallurgprom association, Nikopol, Zaporozhye, and Stakhanov Ferroalloy Works produced some 179,000 metric tons (mt) of ferroalloys in January-February 2000, which corresponds to 119% of the respective 1999’ figures (see table 1).

In February 2000 ferroalloy output exceeded the respective January 2000 figure by some 36%. This proves a rather stable situation on the ferroalloy market.

According to the latest statistics with the Ukraine’s Customs Service, in February Ukraine exported approximately 65,300 mt of ferroalloys worth some USD 27.6 million. This is twice as large as the January exports in terms of physical turnover.

In January-February 2000 the aggregate export figure was 1.5 times greater than that in the respective period of 1999. However, it was a bit less (amounting to 92.5%) than the total export turnover in November-December 1999 (see the figure).

It is worth mentioning that the favorable balance has been achieved mainly on account of soared supplies of ferrosilicon (+2.3 times) and ferromanganese (+1.6 times). During the period under review the number of countries importing Ukrainian ferroalloys grew a little reaching 25 nations. Like in the previous year the CIS member-states were the major clients of Ukrainian ferroalloy works consuming roughly 50.1% of the total Ukrainian exports of these commodities (see table 2).

Russia is the number one among the CIS consumers importing about 47,600 mt or 43.3% of the total ferroalloy exports from Ukraine. Compared to January 2000, the portion of Russia’s imports lowered by 0.6 percentage points. It should be spotlighted that ferrosilicomanganese accounted for the bulk (57.5%) of Ukrainian export supplies to this country in February.

Ferromanganese and ferrosilicon contributed 39.3% and 2.1% to the total respectively. On the whole, the share of manganese ferroalloys in the total Russia-bound ferroalloy exports decreased from 98.5% in January 2000 down to 96.8% in February 2000.

Table 1. Ferroalloy output in Ukraine in 1999-2000 (‘000 metric tons)

Source: Metallurgprom association

Table 2. Ferroalloy exports from Ukraine in 1999-2000 (‘000 metric tons)

Asian countries ranked the second in consumption of Ukrainian ferroalloys and imported 27.7% to the total ferroalloy exports from Ukraine. Ukraine still has presence on the markets of South Korea (9,600 mt) and Turkey (15,400 mt). Silicomanganese makes up 63.7% and ferrosilicon 36.3% of the total ferroalloy supplies to these regions. Some 12.6% of Ukrainian ferroalloy exports were bound to East European countries. Ferrosilicon accounted for 53.7% of this quantity, silicomanganese 23.8%, and ferromanganese 22.4%.

The export pattern of Ukrainian ferroalloys in the first 2 months of 2000 differs from that in 1998-99. Compared to 1999, the portion of ferrosilicomanganese dropped a little, while the share of ferromanganese increased 1.04 times.

Distribution of Ukrainian ferroalloy exports in January-February 2000 was as follows. Ferrosilicomanganese was mainly exported to CIS member-states (47.4% of the total ferrosilicomanganese exports from Ukraine) and Asian countries (31.1%). The chief consumers of Ukrainian ferrosilicomanganese were Russia (29,600 mt), South Korea (9,600 mt), and Turkey (8,300 mt). It is notable that Ukrainian-made ferrosilicomanganese has been featuring a rather dynamic penetration to the Russian market. This statement is proved by a 1.6-time increase in Russia-bound exports against the last year’s figure.

Ferrosilicon was exported to Asian markets (49.1% of the total ferrosilicon exports from Ukraine) and East European countries (32.7%). The major consumers of this commodity were Turkey (7,100 mt) and Poland (2,100 mt). Out of the CIS states, only Belarus imported a bit more than 1,000 mt of Ukrainian ferrosilicon. This year average monthly exports of ferrosilicon are 11% greater than in 1999.

Ferromanganese was mainly exported to CIS countries (86.8% of the total ferromanganese exports from Ukraine) and Eastern European states (13.2%). Russia was the unrivaled leader in consumption importing 17,400 mt of Ukrainian-made ferromanganese (74.0% of the total). Average monthly exports of ferromanganese gained some 15% against 1999.

Among light alloys, the most popular ones were ferronickel (some 1,300 mt exported beyond Ukraine), ferrotitanium (200 mt), and ferrotungsten (20 mt).

A number of ferroalloys, which are not produced in Ukraine, are imported from other countries. In January-February 2000 Ukraine imported 2,800 mt of ferroalloys worth USD 2.9 million. Germany, Lithuania, the Netherlands, Russia, and Sweden were the main exporters of ferroalloys to Ukraine (with Latvia leading the way with some 2,400 mt of ferroalloys). The major item in Ukrainian ferroalloy imports was ferrochromium, which accounted for 86.5% of the total import turnover with ferroalloys.

Besides, Ukraine also imported ferromolybdenum, ferrovanadium, ferroniobium, ferrotitanium, and ferrosilicon.

Ferroalloy exports from Ukraine in 1999-2000

Table 3. Pattern of Ukrainian ferroalloy exports (% of the total)

Notwithstanding various troubles faced by the country’s economy in general, analysis of the current situation on the Ukrainian ferroalloy market drives to a careful optimism.

The data in table 4 witness that Ukrainian ferroalloy manufacturers featured a rather high performance in the first quarter of 2000. Another auspicious factor is the present upturn in the global economic situation (steel output grew 8.4-26.8% in various regions of the world in the 2 months of 2000).

A positive trend prevailed on the world market for manganese ferroalloys in the first quarter of 2000. Prices on the US market for silicomanganese are kept stable and high exceeding the 1999 rates. As of March 20, 2000, price for silicomanganese amounted to USD/mt 551-595 ex-warehouse Pittsburgh compared to the average price of USD/mt 573 in January 2000 and USD/mt 575 in February 2000. Prices on the European market try to keep up with the US prices. In March 2000 the European price for silicomanganese reached DEM/mt 990-1,020 against the average of DEM/mt 950 in January and DEM/mt 960 in February 2000. The Asian market for silicomanganese is quite stable and the prices are ranging between USD/mt 385 and USD/mt 395. Silicomanganese output is anticipated to grow 1-2% in the second quarter of 2000. However, this will not quench the high demands, thus the price situation will still be rather advantageous.

In the first quarter of 2000 similar situation was observed on the ferromanganese market as well. In the second half of March 2000 the European price for ferromanganese with up to 7.5% carbon contents came to DEM/mt 860-900 compared to the average price of DEM/mt 812 in January 2000 and DEM/mt 818 in February 2000. The US price for ferromanganese in the second half of March amounted to USD/lt 470-480 against USD/lt 454 in February 2000.

The ferrosilicon market is heated by hot demands, though the European prices featured a further smooth decline in the first quarter of 2000. In the second half of March 2000 the European prices were equal to DEM/mt 1,100-1,150 against the average January price of DEM/mt 1,200. In March 2000 prices on the US ferrosilicon market were quite stable and somewhat increased to USD/lb. 0.41-0.42 against the average February price of USD/lb. 0.37.

Table 4. Ukrainian ferroalloy market (‘000 metric tons)

Table 5. World prices for ferroalloys

Sources: MBK Ferro-alloys Monthly, Metal Bulletin

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