Price trend
This week, spot prices in the domestic ferrosilicon market retreated, undergoing a slight correction. 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 5,631.43 RMB/ton on May 25. This marked a 2.02% increase for the day, setting a new recent high. On May 26, the price remained steady at this elevated level, holding at 5,631.43 RMB/ton. However, on May 27, the price experienced a significant decline of 1.62%, falling to 5,540 RMB/ton and initiating a rapid downward correction phase. By May 29, the price had rebounded slightly to 5,575 RMB/ton; nevertheless, the daily change represented a 0.99% decline, resulting in a cumulative weekly drop of approximately 1.0%, with the price center of gravity shifting noticeably lower..
Influencing Factors
Upstream Semi-coke Market:
The upstream market for semi-coke—a key raw material—is generally stable but trending slightly weaker. In Shenmu, the primary production hub, ex-factory prices for small-to-medium-sized semi-coke lumps remain within the 1,180–1,190 RMB/ton range; this represents a slight retreat from previous highs, reflecting a diminished willingness among enterprises to hold up prices. Supply Situation: With the latest phase of coal mine safety inspections having concluded, the operating rate of semi-coke producers has rebounded to approximately 70%. Consequently, supply availability has become relatively ample, and some enterprises have begun to see an accumulation of inventory.
Demand Situation: Essential demand remains stable, but the pace of procurement has slowed, and market willingness to chase higher prices is subdued.
Steel Mill Demand: Domestic hot metal production remains at high levels, and essential procurement of ferrosilicon remains stable; however, as the "off-season" effect becomes apparent in the steel market, the pace of steel mill procurement has slowed significantly. Mills show a substantially reduced willingness to purchase high-priced supplies, opting instead primarily for small, need-based replenishment orders.
Magnesium Metal Demand: Operating rates within the magnesium metal industry remain steady at approximately 68%. Consequently, demand for ferrosilicon from this sector remains stable, showing no significant increase.
Export Demand: Overseas orders remain generally stable. However, some export-oriented enterprises have slowed their procurement pace in response to rising domestic prices, thereby diminishing the role of the export market in absorbing—or "diverting"—domestic supply.
Market Transactions: Traders report a significant decline in market activity throughout the week; transactions involving high-priced inventory have nearly ground to a halt, while low-priced orders driven by immediate, essential demand now account for over 90% of the volume. Overall, market participants show little willingness to chase higher prices.
Key Tenders: May tenders for ferrosilicon from major steel mills in the Hebei and East China regions have largely concluded, with prices clustering within the 5,950–6,100 RMB/ton range. The supportive floor provided by these tenders to the spot market is gradually weakening. While tenders from certain southern steel mills for late May have not yet been fully finalized, price expectations for these upcoming tenders have been revised downward, influenced by the rapid retreat in spot market prices.
Inventory Status: A slight accumulation occurred from a low base, resulting in a marginal increase in pressure.
Factory Inventory: Silicon-iron inventory among 60 sample enterprises stands at approximately 90,000 tons—a slight month-on-month increase of 2,000 tons. In major production regions, some enterprises have shown reduced willingness to ship as prices retreated from recent highs, resulting in a modest accumulation of inventory.
Social Inventory: Social inventory of silicon-iron across major cities nationwide totals approximately 54,000 tons—a month-on-month increase of 2,000 tons. Due to rapid price fluctuations, traders have demonstrated limited willingness to restock, keeping inventory levels at a low ebb.
Market Outlook:
In the short term, the overall ferrosilicon market is expected to exhibit a pattern of retreating from high levels and undergoing volatile adjustments.
Support Factors
Cost Support: Although the price of semi-coke has retreated, the production cost for ferrosilicon remains within the range of 5,380–5,430 RMB/ton. Faced with the pressure of operating losses, manufacturers demonstrate a strong willingness to hold prices firm; consequently, there is limited downside potential below the 5,500 RMB/ton mark. Inventory Support: Overall inventory levels remain relatively low compared to the same period in recent years; with no risk of large-scale inventory accumulation, this factor exerts no significant downward pressure on prices.
Suppressing Factors
Demand-Side Pressure: The "off-season" effect has become apparent in the downstream steel market; steel mills have slowed their procurement pace, and the growth in essential demand remains insufficient, significantly weakening price support. Market Sentiment: Traders and end-users have shifted to a cautious outlook regarding future market trends; their willingness to chase rising prices is low, and market trading activity has declined sharply, further amplifying the downward adjustment pressure.
Price Range Forecast
In the short term, ferrosilicon prices are expected to fluctuate and undergo a correction within the 5,500–5,600 RMB/ton range. Should semi-coke prices continue to decline, or if steel mills' tender prices fall short of expectations, prices are likely to breach the 5,500 RMB/ton threshold. Conversely, if cost-side factors stabilize or downstream procurement experiences a temporary uptick, prices may stage a modest rebound toward the 5,580–5,600 RMB/ton level.
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