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    Silicon metal market in Europe dim in Q4
    ----Interview with Manuel Leitgeb
    Vice president
    Remag Leichtmetall GmbH
    Remag was founded in 2004 to provide customers with many kinds of raw materials, including magnesium and silicon metal materials. Since then, Remag grew rapidly and continuously to remain as a global trading company known for its expertise in light metal. The long-time experience (back to the 90's) in the global markets for magnesium, mg alloys, mluminium and aluminium alloys and their components is an essential asset of the company. The company has developed a global network in the light metal business and acted on four continents with local representatives.

    Asian Metal: Hi Mr. Leitgeb, thanks for joining us. Please introduce your company briefly.

    Mr. Leitgeb: Remag is a trading company based in Austria, and we have a history of 17 years already. We supply multiple clients with metal materials including magnesium, silicon metal, and manganese and we continuously provide our clients with best services based on our experiences and expertise over supply and quality control.

    Asian Metal: The prices surged in China since late July, but European market was on holiday until the end of August, how did market participants react after coming back from holiday in early September?

    Mr. Leitgeb: Our clients found out that the prices surged a lot since late July, for example, given the shortage of spot materials, the prices of silicon metal 5-5-3 in Europe increased from USD2,000/t to USD3,400/t in early September, and increased to USD9,000/t in late September. Therefore, most of market participants chose to watch the market over increasing prices and many uncertainties over supply security because they were terrified by the surge.

    Asian Metal: How did the market go in Europe in September?

    Mr. Leitgeb: The prices of silicon metal in Europe also increased a lot, but the prices increased much slower than in China. For example, the prices of silicon metal 5-5-3 stood at around EUR5,000/t D.D.P in September in Europe, but offers we received hovered at around USD8,000-8,500/t FOB China. Therefore, Chinese materials prices were not competitive at all with anti-dump duty.

    Asian Metal: How do you forecast the prices trend and market demand of silicon metal in Q4?

    Mr. Leitgeb: As far as I know, many small sized consumers in Europe already reduced production. Most of our clients usually have three shifts a day, but they only have one or two shifts now a day. Some clients even suspended production as they could not afford current prices. I believe the prices would remain upward trend in Europe if the prices in China don't go down, and the demand would shrink due to high production cost in Q4.

    Asian Metal: There are very few spot materials in Europe, despite the huge increase in September, but the prices in Europe remain lower than prices in China, how do you think European consumers in Europe would deal with it?

    Mr. Leitgeb: There are very few spot materials in Europe indeed. Producers already signed contracts for Q4 much earlier, so they have no more materials to sell. Meanwhile, traders only have very small volume of materials. As far as I know, many traders and consumers already turn their eyes on producers in South Africa, Brazil and Kazakhstan, because they believe supply of Chinese materials is not reliable anymore. If the prices keep going up, medium sized consumers have to decide to suspend production or accept current prices soon.

    Asian Metal: How do you think the Europe market of silicon metal would go in the remaining days of 2021?

    Mr. Leitgeb: The situation is very tough now, only big players in the industry could sustain the market. The prices would continue going up for sure, but the market demand might shrink against increasing purchase cost. Some of our clients would have tenders for Q1 of 2022, and their procurement volume is only 1/4 of their regular consumption volume.

    Asian Metal: What's the anticipation for silicon metal business of your company in Q4?

    Mr. Leitgeb: Given the weakening demand and increasing prices, we expect a decrease of 1/3 over trading volume in Q4. According the tenders and demand from our regular clients, we expect to sell around 500t in Q4.

    Asian Metal: Thanks a lot for accepting the interview, we wish your company the best.

    Mr. Leitgeb: I would like to thank Asian Metal for this great platform and opportunity, and I look forward to more chances over supply from China in the future.
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