In the Asian ferrosilicon spot market, Japan traders bought small lots of 20-100 mt from China suppliers to cover for shipment delays, though most Chinese firms were closed this week for the National Day holiday, sources said Thursday.

Some ferrosilicon shipments from China were delayed in late September by a week or so due to longer customs inspections at the Tianjin port, traders said. The Japan traders were also building up their inventories in case the island dispute between the two countries start to impact trade, they said.

 

But traders said their ferrosilicon purchase volumes were small as the impact from the slower customs clearance was limited. One Japan trader said his shipments from China had not suffered any delays at all.

The traders were also cautious about inventory building.

 

"I am thinking of boosting inventory a little, allowing us to sustain supplies to end-users for a month in case of geopolitical tensions intensify," said one Tokyo trader.

Japanese steelmakers do not plan to increase their raw material inventories, as steel demand outlook for the October 2012-March 2013 period was gloomy, trade and mill sources said.

Raw material requirement may possibly decrease by around 10% from the previous six-months, some said.

Tokyo Steel has bought 100 mt of ferrosilicon for October-November delivery to its Okayama plant via a buy tender that closed on October 2. Two other electric arc furnace operators were seeking 20-100 mt cargoes for October-November, traders said.

Meanwhile, the Japanese spot import price stayed flat from last week, at $1,320-1,340/mt CIF Japan, according to Platts assessments.

Two Japanese traders reported buying 20-100 mt lots at $1,320/mt CIF Japan, October shipment from the Tianjin port of China. A third trader sold 100 mt to a consumer at $1,340/mt CIF Japan for October-November delivery.

One Russian producer has offered at $1,340-1,360/mt CIF Japan but has failed to attract buyers, said Japan traders.