Price trend
In early August, ferrosilicon inventories in some regional factories were low, with production primarily based on scheduled orders. Announcements of rising raw material prices further supported cost support, leading to a slight increase in ferrosilicon spot prices. However, starting in late August, ferrous metal futures prices declined, with both ferrosilicon futures and spot prices falling further, maintaining a generally sluggish trend. According to the SunSirs Commodity Market Analysis System, on August 28, ferrosilicon (grade: FeSi75-B; particle size/mm: natural lump) was quoted in the Ningxia region at 5,250-5,400 RMB/ton, with an average price of 5,310 RMB/ton, a 3.20% decrease from the beginning of the month.
Influencing Factors
Raw Materials
Semi-coke: In mid-August, semi-coke started the second round of price increase. The semi-coke market had been operating stably after the increase, and most companies implemented the increased prices. The market prices of small and medium-sized materials were still strong, but there was limited room for continued increase in coke flour prices. The pace of coke flour shipments of some companies had slowed down slightly. As of August 28, the price of medium-sized raw materials in Shenmu market was 630-710 RMB/ton, the price of small raw materials was 630-690 RMB/ton, and the mainstream price of coke flour was 470-520 RMB/ton; the price of medium-sized raw materials in Fugu market was 640-680 RMB/ton, the price of small raw materials was 630-760 RMB/ton, and the mainstream price of coke flour was 460-580 RMB/ton; the mainstream price of coke flour in Zhongwei market was 530 RMB/ton; the price of mixed raw materials in Shizuishan market was 520 RMB/ton; the price of medium-sized and small raw materials in Ordos market was 645-670 RMB/ton, and the mainstream price of coke flour was 560 RMB/ton; the price of medium-sized and small raw materials in Hohhot market was 650-660 RMB/ton, and the mainstream price of coke flour was 580 RMB/ton; The price of small and medium-sized materials in Hami market was 580-700 RMB/ton, coke flour was 240 RMB/ton, and mixed materials were 195-280 RMB/ton; the price of small and medium-sized materials in Changji market was 600-700 RMB/ton, coke flour was 300 RMB/ton, and the above are all ex-factory prices in cash including tax; the price of small and medium-sized materials in Tianjin Port was 930-980 RMB/ton, and coke flour was 720-880 RMB/ton, and the above were all port closing prices in cash including tax; the price of small materials in Yumen market was 255-460 RMB/ton, coke flour price was 320-550 RMB/ton, carbon powder price was 440-450 RMB/ton, and rice material price was 350-380 RMB/ton, all are ex-factory prices in cash including tax.
Supply and Demand
Beginning in mid-to-late May, ferrosilicon production began to increase. In contrast, production activity remained relatively stable in June, exhibiting a wave-like adjustment pattern. In July, with the market gradually improving, particularly the rapid rise in prices, manufacturers actively hedged, leading to increased production activity in Ningxia. This trend continued to this day. As of August 21st, national weekly ferrosilicon production reached 113,400 tons. The annual peak was 115,800 tons on March 13th, a difference of 2,400 tons. Overall, with weekly production exceeding 110,000 tons in March, monthly ferrosilicon production reached 500,000 tons. August showed a steady upward trend, and overall production is expected to exceed 480,000 tons.
Steel Tendering
HBIS' ferrosilicon tender on August 13th priced 6,030 RMB/ton for 2,835 tons, a 430 RMB/ton increase from the previous month. This round of steel tendering coincided with a high market, with both market sentiment and spot supply supporting prices to a certain extent. However, after a week of market feedback, the tendered prices saw a significant decline. Following the pricing of most northern steel mills, some saw prices drop by 200 RMB/ton.
Import and Export Data
Ferosilicon exports totaled 35,946 tons in July, a 3.52% increase from the previous month. Imports totaled 12,479 tons, a 39.83% decrease from the previous month. From January to July, ferrosilicon export data shows that after the impact of the Spring Festival gradually subsided, ferrosilicon exports remained stable at around 35,000 tons. Within ferrosilicon imports, bonded warehouse transit goods accounted for 15,000 tons per month. This cargo was primarily re-exported to other locations abroad for consumption, without impacting the domestic market.
Market outlook
Overall, the ferrosilicon market faced increasing fundamental pressures in the recent times, with limited short-term changes. An upward shift in Ningxia's electricity prices in August will provide some bottom support. It is expected that ferrosilicon spot prices will remain sluggish in September.
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