JFE Steel to Sign FeMn Purchase Pact with Samancor

JFE Steel agreed with Samancor, which is ferromanganese making joint venture of BHP Billiton and Anglo American, to purchase annual 50,000 tonnes of high carbon ferromanganese for 3 years. JFE Steel signs the agreement on May 14. The firm shifts from spot purchase mainly from China to long term contract with higher supply risk from China. The firm secures almost all the requirement through long term contracts for stability when the firm increases the output mainly for high valued steel items. The firm purchases ferromanganese from Samancor from fiscal 2007 started April. The firm purchases annual 70,000-80,000 tonnes from the group company, Mizushima Ferroalloy and smaller volume from Eramet through long term contracts. The firm covers annual 130,000 tonnes of requirement through the contracts. Chinese suppliers tend to stop shipment when market price increases. Chinese government increased the tariff for ferromanganese from 5% to 10% in November 2006 to secure domestic supply. JFE Steel made Brazilian ferrosilicon maker, Nova Era Silicon subsidiary in 2006. The firm also launched silicomanganese joint venture, Inner Mongolia Erdos EJM Manganese Alloys in 2006. The firm tries to secure ferroalloys more stable manner.