LONDON – European traders of ferrosilicon reported little in recent days in the markets as speculation continued to build over the possible partial lifting of anti-dumping duties on non-European imports. The European Union Directorate General for Trade is said to be reviewing existing anti-dumping measures on imports of ferrosilicon from Russia and China, which carry duties of 74 percent and 49.7 percent, respectively.

EU officials said that no decision had yet been published on the outcome of its review.

Definitive anti-dumping measures were imposed on Russian imports of ferrosilicon in 1993, and were due to expire in December 1998, at which point the EU launched an expiry review to determine whether to lift or maintain the duties.

European traders however said on Friday that negotiations between the EU and the countries subject to the duties were moving swiftly ahead, and some expected a decision by the end of next month.

"There is talk of the EU reaching a compromise with some of these producer countries, but no announcement would be likely to be made before April," said one bulk-alloys trader.

Lower-grade ferrosilicon is normally used in the production of steel as a standard de-oxidizer, while 75 percent grade is alloyed with steel to produce electrical sheet for stamping laminations, as well as spring steels.

Prices for standard 75 percent ferrosilicon held steady at $540/$570 a ton on an in-warehouse basis in Rotterdam, unchanged from the previous week.

IMPACT OF DUTY CUTS

With the possibility of duties on some of the non-EU imports being curbed seeming imminent, traders said the ultimate effect this would have on the market was not clear.

One noted that the impact would be minimal on the United States and Asian markets, while in Europe most 65 percent Russian-origin ferrosilicon was absorbed by the German steel industry, while other countries relied on duty-free shipments from Norwegian producers. "There is very little non-European material coming in at the moment, because of the anti-dumping duties, and the strong dollar, which doesn't help other producers as the Europeans now do all their business in euros," said another.

"There has been a review ongoing in Europe, and the EU will most likely decide to lift the duties. This has been factored in for some time, which makes it rather an uninteresting market to be involved in," said another trader.

ELKEM TO CUT BACK

In the meantime, major Norwegian producer Elkem said recently that it plans to shut one of three furnaces at its Salten plant, thereby cutting its 90,000-ton-a-year production by 30,000 tons.

Traders were unconvinced that even such a move as this would serve to prop up prices in a market that struggled with oversupply and now the prospect of increased imports from outside the EU.

"This seems like a big cut, but it just gives someone else the possibility to produce 30,000 tons more. Elkem are probably not looking so much to cut production as to stop producing their own raw material," said one trader.