SunSirs: Continuing the Pre-Holiday Weakness, Domestic Ferrosilicon Market Was Down

Price trend

Continuing the pre-holiday weakness, ferrosilicon futures prices continued to fluctuate downward after the holiday. Some buyers showed increased enthusiasm for on-site purchases, but the outflow of low-priced goods from delivery warehouses had a significant negative impact on factory shipments. Furthermore, the latest news of electricity price cuts in some regions, the post-holiday reopening of the market, and the lower-than-expected market demand, as well as the inventory accumulation of some silicon factories during the holiday, all weighed on the overall market. Recently, some industry confidence has weakened slightly, and some actual transaction prices have loosened. According to the SunSirs commodity market analysis system, on October 11, the market price of ferrosilicon (grade: FeSi75-B; particle size/mm: natural block) in Ningxia was between 5,100-5,280 RMB/ton, with an average market price of 5,171 RMB/ton, a decrease of 2.84% from before the holiday.

Influencing factors

Raw material semi-coke market:

The national semi-coke market remained stable last week, with companies' quotations remaining largely unchanged and shipments steady. As of October 11, downstream semi-coke demand had yet to show any significant signs of improvement, and overall market sentiment was cautious. Coal prices had fluctuated slightly, supported by the winter heating season's increased demand for coal, with relatively limited downward movement. Entering the fourth quarter, some companies that underwent maintenance were gradually resuming production, and semi-coke production is expected to increase. This increase in supply may put some downward pressure on semi-coke market prices. For the future market trend, we must continue to focus on two key variables: first, price fluctuations in raw materials; second, changes in market supply and demand, which will jointly determine the future direction of semi-coke prices.

Construction status

Ferrosilicon manufacturers were operating at high rates, with cost being a key factor supporting silicon prices. As of October 9th, the national operating rate (capacity utilization) stood at 35.94%, a 0.61% increase from the previous week. Average daily output was 16,549 tons, a 1.19% increase, or 194 tons, from the previous week.

Downstream situation

Regarding exports, domestic ferrosilicon prices have recently dipped, and the export market has seen limited sales momentum. Steel production has declined this period, with a significant drop in rebar production. Prior to the National Day holiday, some steel mills had already stockpiled and replenished their inventories. Traders, who were largely purchasing on demand, were generally concerned about the market outlook and were adopting a cautious wait-and-see approach. Coupled with the slow release of downstream demand, large-scale stockpiling was difficult to implement. A steel mill in East China launched its October ferrosilicon tender, with a purchase quantity of 1,000 tons. A steel mill in North China also launched a new round of ferrosilicon tenders, with a purchase quantity of 700 tons.

Market outlook

Based on comprehensive analysis of various situations, due to the interweaving of bullish and bearish information, buyers and sellers were in a game situation. It is expected that the ferrosilicon market may fluctuate within a range in the short term, and the possibility of a major price adjustment may be small.

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