SunSirs: Last Week's Ferrosilicon Spot Prices Saw Slight Uptick

Despite increased market inquiries and purchasing activity as some steel mills launched and finalized new rounds of ferrosilicon tenders, prevailing sentiment has shifted toward caution. Most participants are awaiting pricing guidance from major benchmark producers' upcoming tenders, leading to heightened wait-and-see sentiment. Actual transaction volumes remain subdued and require further improvement. Recent tender results show a significant decline compared to last month. Coupled with volatile futures trading, the lack of price adjustments in the futures market fails to provide effective support for the spot market. As a result, ferrosilicon prices have remained range-bound recently, with market quotations showing little change, though some actual transaction prices have seen minor adjustments.

According to SunSirs Commodity Market Analysis System,

on September 5, the market quotation for ferrosilicon (Grade: FeSi75-B; Particle Size/mm: Natural Lump) in Ningxia was 5,150-5,300 RMB/ton, with an average market price of 5,214 RMB/ton, up 0.14% from Monday.

I. Influencing Factors

Raw Material Coking Coal Market:

The national coking coal market remained stable this week, with most enterprises maintaining firm pricing. As of September 5, the Shenmu market quoted medium-grade coking coal at 630-710 RMB/ton, small-grade at 630-690 RMB/ton, and coke fines at 470-520 RMB/ton. Fugu Market: Medium-grade coke quoted at 640-680 RMB/ton, small-grade at 630-760 RMB/ton, coke fines at 460-580 RMB/ton; Zhongwei Market: Mainstream coke fines price at 530 RMB/ton; Shizuishan Market: Mixed coke at 520 RMB/ton; Ordos Market: Medium-small grade coke priced at 645-670 RMB/ton, coke breeze at 560 RMB/ton; Hohhot Market: Medium-small grade coke priced at 650-660 RMB/ton, coke breeze at 580 RMB/ton; Hami Market: Medium-small grade coke priced at 580-700 RMB/ton, coke breeze at 240 RMB/ton, mixed coke at 195-280 RMB/ton; Changji market: Small and medium-sized coal priced at 600-700 RMB/ton, coke fines at 300 RMB/ton. All prices are ex-factory cash inclusive of tax. Tianjin Port: Lan coal small and medium-sized coal priced at 920-980 RMB/ton, coke fines at 720-880 RMB/ton. All prices are port delivered cash inclusive of tax. Yumen Market: Small-sized coke currently priced at 255-460 RMB/ton, coke fines at 320-550 RMB/ton, carbon powder at 440-450 RMB/ton, and rice-sized coke at 350-380 RMB/ton. All prices are ex-factory cash inclusive of tax.

Production Status

Strong cost support for ferrosilicon, coupled with improved market conditions this week, has boosted producers' willingness to resume operations. As of September 4, the national operating rate (capacity utilization) stood at 36.34%, down 0.20% week-on-week. Daily output averaged 16,430 tons, up 1.70% week-on-week, an increase of 275 tons.

Downstream Situation

Overseas demand remains weak, but domestic steel mills are currently in the peak procurement season for September steel tenders, showing signs of demand recovery. After spot prices stabilized and rebounded, some traders believe prices have bottomed out. Coupled with a weak recovery in downstream terminal demand from sectors like real estate, some steel mills have entered the market to purchase. Most downstream players are waiting for Hebei Iron & Steel's tender results before entering the market. Traders with low inventory levels showed strong restocking enthusiasm, improving overall market transactions. A group's new ferrosilicon tender prices: Delivery to Anhui: ¥5,610/ton, quantity: 300 tons; Delivery to Jiangsu: ¥5,610/ton, quantity: 32 tons; delivered to HeRMB, Guangdong at 5,790 RMB/ton, with a purchase volume of 100 tons; delivered to Yunfu, Guangdong at 5,760 RMB/ton, with a purchase volume of 600 tons. Compared to the previous round, the procurement prices showed varying degrees of decline. The total procurement volume was 1,032 tons, all delivered to the factory on a cash basis inclusive of tax. A steel mill in East China finalized its new round of ferrosilicon procurement at 5,778 RMB/ton. A steel mill in South China finalized its new round of ferrosilicon procurement at 5,770 RMB/ton, a 250 RMB/ton decrease from the previous round, with a purchase volume of 500 tons; A special steel mill in East China launched a new round of ferrosilicon bidding, with a purchase volume of 1,000 tons; A steel mill in Jiangsu set its ferrosilicon bidding price at 5,750 RMB/ton for 600 tons, with electronic vouchers.

II. Analysis and Forecast

Current ferrosilicon social inventories are rising. With supply remaining largely unchanged in September and demand showing only a slight rebound, September supply and demand may remain in a tight balance. Looking ahead to September steel demand, significant improvement is unlikely.

Last week, being the beginning of the month, traders facing tight capital may have sold at lower prices, putting pressure on ferrosilicon prices. However, the downside potential for ferrosilicon costs is limited.

Overall, ferrosilicon spot prices are expected to remain relatively stable in the short term.

As an integrated internet platform providing benchmark prices, on September 9, the benchmark price of ferrosilicon from SirSirs was 5,214.29 RMB/ton, down 1.8% from the beginning of this month (5,310.00 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.