Price trend:

Last week, the overall futures market for silicomanganese was weaker, market confidence declined, factories faced significant losses, spot prices fell, while raw material prices remained stable with limited downside potential, and many factories suspended quoting prices. According to data from the SunSirs commodity market analysis system, at the end of this week, the market price of silicomanganese (FeMn68Si18 specification) in Ningxia was around 5,350-5,500 RMB/ton, with an average market price of 5,438.00 RMB/ton, a slight decrease of 1.77% compared to the beginning of the week.

Influencing factors

On the supply side: Factory operating rates in Inner Mongolia fluctuated slightly last week, with some factories expected to ignite new capacity; however, the specific situation remained to be seen. Some factories ignited high-silicon production last week, and high-silicon output was expected to increase last week. In Ningxia, production was operating normally, with no significant increases or decreases in output as of November 21.

Production in southern regions decreased slightly. A factory in Xingyi, Guizhou, suspended production for maintenance due to a furnace problem. The resumption time was temporarily undetermined, affecting daily output by about 200 tons. In Guilin, Guangxi, most factories used spot trading for electricity. During off-peak hours, the electricity cost for one shift was around 30 cents, and production enthusiasm was still acceptable.

Since the end of October, except for Hunan where new production capacity has come online and increased production in December, overall output in other southern regions has declined significantly. Specifically, Yunnan's daily output has decreased by approximately 800 tons, Guizhou's is expected to decrease by 500 tons by the end of the month, and Hunan's by around 200 tons.

According to statistics, the operating rate of silicomanganese enterprises nationwide last week was 39.13%, a decrease of 0.46% compared to the week before last; the average daily output was 28,130 tons, a decrease of 380 tons.

Upstream costs: The manganese ore market remained relatively stable last week, with prices consolidating. Some traders were actively selling, leading to relatively firm prices for oxide ore. Supported by costs, prices for South African semi-carbonate and high-iron ore at Tianjin Port remained firm, while Gabonese supplies were tight, keeping prices high. Australian ore saw increased inquiries due to its cost-effectiveness, resulting in a steady upward trend in prices. Inventory at Qinzhou Port remained low, and spot prices slightly decreased after the arrival of South African vessels. Australian and Gabonese ore prices remained relatively stable, with factories stockpiling futures ore.

As of November 21, the mainstream price for semi-carbonated coal at Tianjin Port was 34.5 RMB/MTU, South African high-speed rail coal was 29.5-29.8 RMBMTU, Gabonese coal was around 40.5 RMB/MTU, and Australian lump coal was traded in the range of 39.5-41 RMB/MTU, with transactions involving various factors.

Manganese ore prices at Qinzhou Port had risen, influenced by increases in overseas prices, with spot prices for oxide ore following suit. Semi-carbonated ore was priced at 37 RMB/MTU, South African high-speed rail ore at 31 RMB/MTU, and Australian seed ore at 35.5-36.5 RMB/MTU depending on its grade.

On the demand side: According to surveys, the output of the five major steel products last week was 8.3438 million tons, a decrease of 223,600 tons week-on-week. Among them, the output of rebar, wire rod, hot rolled coil, and mild steel plates decreased, while the output of cold rolled coil increased. Steel mills entered the maintenance phase, and demand is expected to enter a downward cycle.

It is reported that a steel mill in East China had finalized its latest bidding price for silicon-manganese alloy at 5,700 RMB/ton (acceptance payment), with a purchase quantity of 1,000 tons. Another steel mill in East China had finalized its latest bidding price for silicon-manganese alloy at 5,600 RMB/ton (cash payment), with a purchase quantity of 1,000 tons. It is also reported that a steel mill in Guangdong had finalized its latest bidding price for silicon-manganese alloy at 5,730 RMB/ton (acceptance payment), with a purchase quantity of 1,000 tons.

Market Forecast:

In summary, the decline in ferrosilicon futures prices last week had impacted market confidence. Overall supply pressure remained high, while overall demand had decreased, making cost support alone insufficient. According to SunSirs, the ferrosilicon market is likely to continue its weak and volatile trend in the short term.

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