Price trend

During this period (August 10-14), the ferrosilicon market initially underwent narrow-range consolidation before surging on Friday. Data from the SunSirs commodity market analysis system shows that the market quote for ferrosilicon (Grade: FeSi75-B; Size: natural lumps) in the Ningxia region was 5,570 RMB/ton on August 10; by August 14, the price had risen significantly, climbing 0.36% to 5,590 RMB/ton. Overall, price fluctuations were limited during the first four trading days as the market adopted a wait-and-see attitude; however, on August 14, prices broke through the upper limit of the trading range, shifting the price center upward.

Influencing factors

Upstream Semi-coke Market Situation:

Last week, the semi-coke market saw moderate support. Operating rates at semi-coke enterprises in key producing regions—Shaanxi and Inner Mongolia—remained stable, ensuring ample overall supply; no new production restriction policies were implemented, and market liquidity remained high. Prices fluctuated within a narrow range, with mainstream transaction prices holding steady and showing no significant volatility; production costs for ferrosilicon smelting remained within a stable range.

Demand Situation: Stable essential demand with bullish expectations

HBIS Group set its August tender price for ferrosilicon at 6,180 RMB/ton, up from 6,130 RMB/ton in July. The tender volume for August (Grade 75B) was 3,640 tonnes—including 900 tonnes for the Tangshan Heavy Plate plant—marking an increase of 260 tonnes from the previous round's 3,380 tonnes. With the August steel mill tenders largely concluded, mainstream tender prices have remained relatively stable. While steel mills are maintaining routine procurement to meet essential needs—without significant short-term, large-scale stockpiling—there are expectations of price increases for the next round of tenders, prompting some traders to position themselves early and lock in supplies.

Inventory Status: Slight decline in factory inventories; social inventories stable with a firming trend.

As spot shipments continue, in-plant inventories at some ferrosilicon factories in Northwest China are gradually decreasing, bolstering manufacturers' confidence in maintaining price levels. While stocks acquired by traders at lower price points earlier remain in circulation, traders are reluctant to increase holdings at current high prices; instead, they largely favor a "quick-turnover" strategy rather than sustained stockpiling. Current inventory levels do not exert significant pressure or act as a clear bearish factor for the market; however, the lack of sustained, substantial inventory depletion makes it difficult to drive a sustained, unidirectional upward trend in prices.

Market Outlook

In the short term, ferrosilicon prices are prone to rising but lack staying power; the market is likely to see range-bound trading at high levels, with limited upside potential and gradually accumulating downside risk.

Supporting Factors

The market continues to weigh expectations of price hikes in steel mills' September procurement tenders; bullish sentiment persists, providing short-term support for spot price floors. Upstream semi-coke prices remain stable, creating a cost floor for smelting and limiting the scope for significant price drops. Factory inventories are gradually declining, and producers show a strong willingness to maintain price levels, with little inclination to sell at low prices.

Risk Factors

Downstream end-users are wary of high price levels, and spot market trading lacks sufficient follow-through; the upward price trend is unsupported by sustained, genuine consumption. The primary uncertainty lies in September steel tender prices: should they fall short of optimistic market expectations, prices could undergo a rapid correction once the speculative momentum fades.

Price Range Outlook

In the short term, the key reference range for ferrosilicon spot prices is 5,550-5,630 RMB/ton. Prices may briefly test the upper end of this range if expectations regarding steel mill tenders continue to build; however, should these expectations fail to materialize, the market will likely retreat from its highs and drift back toward the 5,550 RMB/ton level. Trading strategy should avoid blindly chasing highs; instead, the focus should remain on tracking the results of steel mill tenders for September.

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