Domestic spot prices for ferrosilicon rose rapidly last week. According to data from the SunSirs commodity market analysis system, the market quote for ferrosilicon (Grade: FeSi75-B; Size: natural lump) in the Ningxia region stood at 5,647.14 RMB/ton on August 31. Prices subsequently climbed steadily, reaching 6,100 RMB/ton by September 4—a maximum weekly increase of 8.02%. Market sentiment turned bullish, driven by cost support from consecutive hikes in semi-coke prices, the arrival of the traditional "Golden September" peak season, and expectations of pre-holiday stockpiling by steel mills ahead of the Mid-Autumn Festival and National Day; furthermore, prices from recently concluded steel mill tenders showed a marked increase compared to the previous month. A reluctance to sell and a determination to hold out for higher prices grew among industry players, boosting overall confidence and driving ferrosilicon prices to surge in a step-like pattern throughout the week. Spot trading was brisk, with producers repeatedly raising quotes and traders following suit, reflecting a strong overall bullish outlook.
Influencing factors
Upstream Semi-coke Market: Semi-coke prices trended upward last week, providing strong cost-side support for ferrosilicon. Quotations from major producers in the Shenmu region varied significantly (prices are ex-works, tax-inclusive, cash terms): mainstream transaction prices for medium-sized semi-coke ranged from 1,100 to 1,350 RMB/ton (with Huineng quoting 1,120 RMB/ton and Junkai Coal & Power quoting 1,350 RMB/ton); small-sized semi-coke ranged from 1,080 to 1,310 RMB/ton (Huineng at 1,100 RMB/ton, Junkai Coal & Power at 1,310 RMB/ton); and semi-coke fines ranged from 930 to 1,030 RMB/ton (Huineng at 950 RMB/ton, Junkai Coal & Power at 1,000 RMB/ton). Driven by the rising cost of raw lump coal, semi-coke quotations have been raised repeatedly; this has increased raw material costs for ferrosilicon smelting and restored production margins, thereby boosting the willingness of ferrosilicon plants—previously subject to maintenance or output restrictions—to resume production and simultaneously reviving market demand for semi-coke. Significant price disparities exist between supplies from different coal enterprises, allowing ferrosilicon plants to flexibly select and purchase materials based on their own cost structures, which further solidifies the cost floor for ferrosilicon.
Demand Situation: Essential procurement by downstream steelmakers remains steady, with mills primarily replenishing stocks based on immediate needs; there is no sign of large-scale, concentrated buying, and willingness to actively stockpile is limited. Operating rates in external downstream sectors—such as casting and magnesium production—are recovering slowly, resulting in limited release of actual end-user consumption. The recent rise in ferrosilicon prices is driven largely by spot market sentiment and producers' efforts to hold up prices rather than a significant rebound in downstream demand; consequently, the demand side has yet to provide strong fundamental support.
Inventory Status: Social inventories of ferrosilicon remain within a neutral range, showing neither significant accumulation nor rapid depletion. Manufacturers face little pressure regarding spot inventory; with prices rising, they are increasingly reluctant to sell. Traders hold low inventory levels, generally favoring a "quick-turnover" approach and remaining cautious about stockpiling. Inventory levels are not driving a one-sided market trend; instead, market movements are primarily shaped by sentiment, costs, and expectations regarding steel mill tenders.
Market Outlook
In the short term, bullish sentiment persists, and with expectations of price hikes in steel mill tenders, ferrosilicon prices retain a degree of resilience. However, as multiple timeframes simultaneously signal an overextended rally, the risk of a short-term technical correction is gradually mounting. Should subsequent steel mill tenders fall short of expectations, or if a resumption of production at plants leads to increased supply, the market could see a pullback after an initial surge or settle into a period of high-level oscillation and consolidation. From a medium-term perspective, it is essential to monitor actual steel mill procurement volumes, fluctuations in semi-coke costs, and the pace at which ferrosilicon producers resume operations. Unless there is a substantive improvement in downstream demand, the sustainability of this rally remains in doubt; the market is likely to experience high-level volatility, making it unwise to blindly chase further price gains.
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