ArcelorMittal, the leading European steel producer, is increasing the premium on ferroalloys for carbon steel sheets in response to rising prices following the introduction of new protective measures for materials.
The increase depends on the product, with the volume of wholesale shipments likely to increase by just a few euros, while 10-15% of the company's orders may incur an additional charge of about 10 euros per ton. Prices for special alloys may rise even more - up to 20-50 euros per ton for some types of products.
Prices for ferroalloys have increased everywhere since the introduction of the tariff quota by the European Commission. Prices for silica manganese with a manganese content of 65% increased by 175 euros per ton between November 20 and December 9 and averaged 1,140 euros per ton, according to Argus estimates. During the same period, ferrosilicon with a silicon content of 75% jumped from 317.50 euros per ton to 1,525 euros per ton, while ferromanganese prices increased by 167.50 euros per ton to an average of 1,140 euros per ton.
Some ferroalloys, such as ferromanganese, will also be supplied under CBAM, further increasing the cost of imports.
Interestingly, some rolled products of higher caliber have very high default values compared to more common grades. For example, for organosilicon electrotechnical steel with a granular structure, the default CBAM value for each country is much higher than the corresponding values for more commercial steels. For example, in Japan, the standard value for electrical steel with grain sizes HS722511 and HS22611 is more than 5 tons, compared with just 2.31 tons for 7208 products; in South Korea, the standard value for both of these products is more than 5.85 tons, compared with 2.33 tons for 7208 products. In China, which accounts for the majority of grain imports, the default value for these products is almost 9 tons, compared with 3.82 for 7,208 products.
The high standard value for silicon-based steel appears to be related to the particularly stringent measures the EU is taking to protect its heavily-pressured ferrosilicon industry from cheaper and carbon-intensive foreign competition. Under the protective measures introduced by the EU last month, ferrosilicon received maximum support by setting a minimum price threshold exceeding quotas at 2,408 euros per tonne in Europe, more than double the price on the spot market before the protective measures were introduced.
