[Ferro-alloys.com] Domestic production is down arising from decrease in water power generation due to record-setting drought

According to the customs statistics of Brazil, ferro-silicon imported in April was 1,137 tons, up by 3.4 times as much as the prior month. Originally, Brazil is a main production country of ferro-silicon, but the production curtailment has been going on due to domestic power shortage, and resultingly the quantity imported is going to increase.

At the moment, with the background that now there has been a record-setting drought in Brazil, the reservoir water level has got lowered and the water power generation has decreased in the extreme, which led to the serious power shortage going on. Compared with the cheap rate of water power, the rate of thermal power is said to be 30 times as much as water power, and no small producers among ferroalloy producers have decided to give up continuing operation and suspend operation until the electricity supply recovers.

Especially, this tendency is noticeable in the production of ferro-silicon, and the movement has become active to buy imported goods to cover the portion of domestic consumption. The breakdown of ferro-silicon (Si>55%) imported in April was 600 tons from Venezuela, 172 tons from India, 151 tons from China, 125 tons from Colombia and 89 tons from others, and the sharp increase in the import from Venezuela is outstanding.

This seems to be partly because USA is going to impose an antidumping duty on Venezuelan ferro-silicon. Besides, nowadays the major producer in China has concluded a new contract for just over a thousand tons meant for Brazil, and the inquiries for prices also have been becoming active from Brazil to the producers in other countries.

The drought in Brazil is forecast to become prolonged and serious, and the import of ferro-silicon is anticipated to increase. Besides, there is a possibility the export-oriented production also will be affected. 

• [Editor:Phillip.Feng]