Price trend

The ferrosilicon futures market was strong, increasing market activity. Ferrosilicon market prices have risen by 10-50 RMB/ton. According to data from SunSirs, the mainstream price of ferrosilicon (grade: FeSi75～B; particle size/mm: natural lumps) in Ningxia on February 26 was around 5,150-5,300 RMB/ton, with an average market price of 5,190 RMB/ton, up 0.55% from the previous trading day.

Market Analysis

On the supply side: The ferrosilicon futures market was trending strongly, while spot market demand was weak, and the national operating rate was at a historically low level for this time of year. Some manufacturers of semi-coke have lowered their purchase prices by 50 RMB/ton, to 685 RMB/ton (ex-factory price, acceptance, including tax). Regarding electricity prices, Ningxia still had a cost advantage in settlement prices, while electricity prices in Qinghai, Gansu, and Shaanxi were relatively high, putting significant pressure on enterprises' production. Close attention needs to be paid to the final settlement electricity prices in various regions in February.

Downstream: Terminal demand recovery was slow, steel mills were mainly purchasing on an as-needed basis, and ferrosilicon inventory was relatively high, leading to cautious purchasing sentiment. The magnesium metal industry maintains production on order backlog, with relatively stable demand, but this had limited impact on ferrosilicon prices. A steel mill in Jiangsu Province was bidding for ferrosilicon at 5,690 RMB/ton, with a purchase quantity of 600 tons (cash, tax included).

Market Outlook

In summary: With steel mills resuming operations at an accelerated pace after the holiday and restocking demand gradually being released, ferrosilicon prices have further upward momentum; however, if downstream demand remains weak, prices may fluctuate with a downward bias.

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