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PrintFerroalloy imports to the United States are unlikely to increase in October as demand is still slack, even as the strengthening U.S. dollar would allow for cheaper imports of material from ferroalloy-exporting regions like South Africa and Eastern Europe.
"Most people are trying to unload material at this point rather than trying to buy it," one trader said.
"The market is uncertain at the moment, so we’re not looking to import anything. We’re actually trying reduce our downside risk," a second trader echoed.
The strengthening U.S. dollar means imports from ferroalloy-producing regions like Eastern Europe and South Africa have become cheaper.
One U.S. dollar bought €0.74 Thursday, while the same amount was worth €0.70 at the beginning of September. The U.S. dollar has also strengthened against the South African rand, which has depreciated 17 percent this quarter.
"The rand is down, so theoretically (South African producers) could move ferrochrome prices down," a third trader said, adding that this was unlikely due to cost pressures faced by producers in that country.
Coupled with stagnant local demand, imports from South Africa to the United States were unlikely to increase.
"I suspect they’re going to stay more or less where they are and we might even see a slight weakening as there is minimal demand for now," the third trader said.
South Africa has been the most significant importer of ferrochrome to the domestic market so far this year, according to figures from the U.S. Census Bureau.
But while U.S. demand is sluggish, Europe has seen an even greater dip, possibly spurring increased exports to the U.S.
"If the U.S. dollar strengthens further against the Euro, you could see product that traditionally stays in Europe come over here," a fourth trader said, mentioning material from the Ukraine, Georgia and Turkey as likely importers.
Turkish ferrochrome producer Eti Krom AS’s Pittsburgh-based office imports material to the United States while Miami-based Felman Trading Inc. markets manganese alloys from plants in the Ukraine, Georgia and Romania.
This year, both Turkey and the Ukraine have imported significant amounts of ferrochrome and manganese alloys, respectively, according to Census Bureau figures.
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