Price trend

Last week, the domestic ferrosilicon spot market saw a slight increase. Recent news of a price increase for raw material semi-coke strengthened support. Furthermore, some silicon mills faced limited inventory pressure and were reluctant to further reduce prices to sell goods. Market demand remained weak, and actual transaction volume needed to improve. Furthermore, some buyers, citing low purchasing prices, were willing to hold back. According to the SunSirs Commodity Market Analysis System, on October 24th, ferrosilicon (grade: FeSi75-B; particle size/mm: natural lump) was quoted in the Ningxia region between 5,150-5,300 RMB/ton, with an average price of 5,192 RMB/ton, a 0.92% increase from Monday. 

Influencing Factors 

Raw Material semi-coke Market:

The semi-coke market performed relatively strongly last week. Rising raw material prices had strengthened the underlying support for semi-coke prices. On the 24th, major downstream calcium carbide companies raised their purchase prices for medium-grade materials by 70 RMB/ton and for small-grade materials by 50 RMB/ton. Overall, semi-coke companies were temporarily facing continued production pressure, and the continued decline in medium-temperature coal tar prices had squeezed profit margins and led to a reluctance to sell. With the start of a new round of price increases, the market was primarily focused on implementing these increases. In late October, as the task of ensuring supply gradually began, the supply of semi-coke market showed a slight growth trend, but the market price of raw materials remained strong before the end of the month. In the short term, the market price of semi-coke will mainly rise and then stabilize temporarily.

Production Status

As of October 24, supply was stable, maintaining previous levels. As of October 23rd, the national operating rate (capacity utilization) was 35.56%, a 0.08% increase from the previous week. Average daily output was 16,295 tons, a 1.12% increase (180 tons) from the previous week.

Downstream Situation

Emotions in major producing areas had eased, and sales had improved. However, overall transaction volume was mediocre. Henan traders were experiencing average market activity, with some companies expressing difficulty in closing deals and refusing to quote. The slowdown in transaction volume suggests demand may be dampening. A steel mill in East China had finalized its new round of ferrosilicon tenders at 5,730 RMB/ton (accepted), a decrease of 190 RMB/ton from the previous round, for a purchase quantity of 1,000 tons. A steel mill in North China had finalized its new round of ferrosilicon purchases at 5,660 RMB/ton (accepted), a decrease of 140 RMB/ton from the previous round, for a purchase quantity of 650 tons.

Market outlook

Ferrosilicon was generally in a state of being supported by costs from below and pressured by emotions from above. All parties said that as the "Silver October" is about to pass and the end of the month is approaching, there is no obvious bright spot in the incremental demand of steel mills, and the export situation in September is not optimistic. Some people are pessimistic about the overall market in the later period; but at the same time, as the raw material semi-coke is stable and stronger, costs such as electricity charges have effectively supported prices. It is expected that the price of ferrosilicon will remain weak in the short term.

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