Last week, spot prices in the domestic ferrosilicon market remained stable initially before surging and subsequently retreating. According to data from SunSirs' commodity market analysis system, the market price for ferrosilicon (Grade: FeSi75-B; Particle Size: Natural Lumps) in the Ningxia region stood at 5,518.57 RMB/ton on May 18, marking a 1.02% increase for the day and extending the previously strong market trend. From May 19 to 20, prices edged down slightly to 5,514.29 RMB/ton, holding steady at a weekly low. On May 21, prices surged to 5,542.86 RMB/ton—a 0.52% increase for the day—reaching a weekly high. On May 22, prices retreated to 5,520 RMB/ton, falling 0.41% on the day; the cumulative weekly gain amounted to a mere 0.03%, indicating relatively minor overall price fluctuations. As of May 24, prices remained steady at 5,520 RMB/ton.
Influencing Factors
Upstream Semi-coke Market: The upstream market for semi-coke—a key raw material—remains stable with a firming bias, as cost support strengthens marginally. In Shenmu, the primary production hub, ex-factory prices for small-to-medium-sized semi-coke grades are holding steady within the 1,180–1,200 RMB/ton range—an increase of approximately 20 RMB/ton from recent lows. Faced with cost pressures, manufacturers are demonstrating a strong resolve to maintain current price levels. Meanwhile, increasingly stringent safety inspections at coal mines have kept the operating rates of semi-coke producers at a relatively low level of around 65%; consequently, overall supply remains tight, with certain product specifications experiencing intermittent shortages.
Demand Situation: Essential demand remained stable, incremental growth was limited, and transaction activity was somewhat cautious.
Steel Mill Demand: Domestic hot metal production remains at high levels, and essential procurement of ferrosilicon remains stable; however, as the steel market enters its traditional off-season, the pace of steel mill procurement has slowed. Purchasing activity is currently dominated by small-volume restocking orders, and willingness to purchase high-priced supplies remains weak. Magnesium Demand: Operating rates within the magnesium industry are holding steady at approximately 70%; consequently, demand for ferrosilicon from this sector remains stable, showing no significant increase. Export Demand: Overseas orders remain generally stable. Ferrosilicon export volumes for May are projected to remain flat month-on-month, implying a limited capacity to divert supply away from the domestic market. Market Transactions: Traders report that market activity throughout the week has been moderate. Transactions involving high-priced supplies have been sluggish, with the market largely driven by essential, low-priced orders; overall willingness to chase higher prices remains insufficient.
Inventory Status: Slight accumulation at low levels; pressure remained manageable
Factory Inventory: Silicon-iron inventory among 60 sample enterprises stands at approximately 88,000 tons—a slight month-on-month increase of 3,000 tons. In major production regions, some enterprises experienced a minor accumulation of inventory as shipping pace slowed following the completion of maintenance work; however, overall inventory levels remain relatively low compared to the same period in recent years. Social Inventory: Social inventory of silicon-iron across major cities nationwide totals approximately 52,000 tons, remaining largely stable month-on-month. Traders are generally maintaining low inventory levels, posing no risk of large-scale sell-offs.
Market Outlook
Overall, the market is expected to exhibit a pattern of high-level consolidation and reduced upward momentum in the short term. On the support side, stable-to-firm prices for semi-coke are driving up ferrosilicon production costs; consequently, manufacturers demonstrate a strong willingness to hold prices firm, limiting downside potential below the 5,450 RMB/ton level. Furthermore, rising tender prices from major steel mills are providing a floor for spot prices, thereby alleviating pessimistic market sentiment. With overall inventory levels remaining low—and no risk of large-scale inventory accumulation—downside potential in the medium to long term remains limited. On the downside, the downstream steel market has entered its traditional off-season; this has slowed the procurement pace of steel mills, resulting in insufficient growth in immediate demand and a weakening of price support. Technically, the short-term moving average spread is narrowing positively, indicating waning upward momentum and emerging pressure for a high-level correction; strong resistance is evident in the 5,550–5,600 RMB/ton range. Traders and end-users are adopting a more cautious outlook regarding future market trends and show little inclination to chase rising prices, leading to a decline in overall market trading activity. In summary, ferrosilicon prices are expected to undergo high-level consolidation within the 5,480–5,550 RMB/ton range in the short term. Should semi-coke prices continue to rise or steel mill tender prices increase further, prices may break through the upper boundary of this range; conversely, if downstream procurement continues to weaken or the broader ferrous metals complex experiences a downturn, prices may retest the support level within the 5,450–5,480 RMB/ton range.
SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.
