Price trend

As of February 6th, the pricing for the new round of ferrosilicon tenders from major manufacturers had been finalized, and the market direction was clear. However, the tendering process at other steel mills was progressing slowly, and overall demand remained relatively weak and needed further improvement. Furthermore, news of maintenance and production cuts at some steel mills in certain regions had emerged, significantly impacting the ferrosilicon and other raw material markets. The market continued to operate under pressure, and the overall trend was suppressed. According to data from the SunSirs commodity price analysis system, as of February 6th, the market price of ferrosilicon (grade: FeSi75～B; particle size/mm: natural lump) in the Ningxia region was 5,300-5,400 RMB/ton, with an average market price of 5,312 RMB/ton, a decrease of 0.38% compared to Monday.

Influencing factors

Raw Material Semi-coke Market: Last week, the national semi-coke market remained stable, with most companies maintaining their prices. As of the 6th, the price of medium-grade semi-coke in the Shenmu market was 760-780 RMB/ton, small-grade semi-coke was 735-750 RMB/ton, and coke fines were 460-520 RMB/ton; in the Fugu market, medium-grade semi-coke was 750-800 RMB/ton, small-grade semi-coke was 735-860 RMB/ton, and coke fines were 480-600 RMB/ton; the mainstream price of coke fines in the Zhongwei market was 560 RMB/ton; and mixed semi-coke in the Shizuishan market was 530 RMB/ton. Overall, raw material prices provided strong cost support for semi-coke, and there were no significant fluctuations in semi-coke production. The semi-coke market remained stable before the holiday, and companies continued to experience losses.

Supply side: Ferrosilicon production costs remained relatively stable, and production enthusiasm was moderate. Market sentiment was stable, although there was some pressure on inventory and shipments. Overall production pace remained steady. As of February 5th, the national operating rate (capacity utilization) was 29.31%, a 0.19% increase compared to the previous week; the average daily output was 14,175 tons, a 0.71% increase compared to the previous week, an increase of 100 tons.

Demand side: Steel procurement began in February, pre-holiday stockpiling increased, and most steel mills had low inventory levels, leading to increased demand for replenishment before the holiday.  The demand for ferrosilicon increased significantly. Last week, Hebei Iron & Steel Group's February tender price for 75B ferrosilicon was 5,760 RMB/ton, unchanged from the previous round (January price was also 5,760 RMB/ton). On February 6th, a steel mill in Yunnan tendered for ferrosilicon at a price of 5,820/5,830 RMB/ton, for a quantity of 300/300 tons, with payment terms of 60% cash + 20% commercial acceptance bill + 20% bank acceptance bill, including tax and delivery to the factory.

Market outlook:

Most markets entered the Lunar New Year holiday closure last weekend. Although production recovered, inventories decreased, and the trend was largely in line with expectations. While there wa some market pressure, it is generally manageable. Downstream steel mills had generally maintained moderate inventory levels, and traders had stocked up less for the winter. The market was mainly characterized by cautious, back-to-back transactions. Futures trading volume remained decent, but the market's acceptance of higher ferrosilicon prices before the holiday was low. Market sentiment was generally cautious, and trading activity was subdued. Ferrosilicon spot prices are expected to fluctuate within a narrow range next week.

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