This week's release of several large tenders is pushing up the ferro-titanium market, as most suppliers have only small amounts of alloy to offer while the longstanding scrap shortage dents smelting activity.
Rotterdam prices for western grade ferro-titanium were assessed at $6.80-7.30/kg yesterday, up from $6.70-7.20/kg on 10 February. Rotterdam prices for Russian grade alloy rose to $6.50-6.90/kg from $6.40-6.80/kg over the same period.
So far, 1,500t worth of enquiries have been confirmed by traders and producers this week. This includes a 620t tender from an Asian steelmaker and several smaller tenders issued by consumers in the US. A German steelmaker is widely expected to approach suppliers in the coming weeks, seeking material.
Several traders have submitted offers in response to the 620t tender, ranging from $7-7.60/kg. Most market participants expect the tender to eventually settle above $7/kg, higher than the previous tender issued by this steelmaker. But some producers are not offering because inventories are low and their ability to produce more is constrained by the scrap shortage. Another seller has been offering 180t of alloy at $7.40/kg to several buyers.
In the US, tenders are attracting offers at higher levels than elsewhere, largely because logistical costs are higher and buyers often seek higher quality grades of ferro-titanium. One seller is offering several lots at $4.10-4.30/lb ($9.02-9.46/kg), albeit for low gas material that usually commands a premium.
"Even if you have the money to pay for scrap, nobody can buy because there's none out there," a trader said. "The aerospace guys come in and swipe everything up. Without that, we lose more than 30pc of our inputs."
Prices for turnings were assessed at $2.05-2.15/lb ddp UK yesterday, holding steady since 13 January and significantly above historical norms.
Uncertainty about supply from Russia and Ukraine is also creating a dynamic where consumers are unsure about long-term commitments to material from those countries. While Russia claims that some forces have pulled back from the Ukraine border, the US and other European governments remain wary and warn that the risk of conflict remain high, which is unsettling potential buyers.
"If you were a steelworker and you've got 10 boxes coming from Russia or Ukraine, how can you plan for your future ferro-titanium deliveries?" asked one trader.
Given the risk of conflict, more ferro-titanium consumers have been approaching producers in the UK, further supporting prices for western grade material. And market participants see potential for prices to rise further in the coming weeks as more steelmakers return to the ferro-titanium market, trying to bounce back from steel production cuts that have stemmed from the semiconductor shortage and its impact on the automotive industry.
