SunSirs: Major Steel Mills Had Not Yet Started Bidding, and the Spot Price of Ferrosilicon Was Running Weakly and Steadily

Price trend

With the overall rise in ferrous metal futures providing a favorable impetus, ferrosilicon futures prices fluctuated upwards. Coupled with rising coal prices boosting market sentiment and strengthening the support level for semi-coke prices, as well as higher electricity prices in some regions, ferrosilicon production costs increased. Some silicon plants in certain areas had already entered a loss-making state, and the losses were widening. As of November 7, some industry players wee reluctant to sell, maintaining prices and showing little willingness to further lower prices to move inventory. However, as of November 7, the progress of bidding by major steel mills had been slow, and actual demand remained relatively weak. Furthermore, news of steel mills reducing or halting production in some areas due to environmental protection and losses continued to negatively impact the raw material market for ferrosilicon and other raw materials. The interplay between buyers and sellers kept ferrosilicon prices under pressure, resulting in a relatively stagnant overall trend. According to the SunSirs commodity market analysis system, on November 7th, the market price of ferrosilicon (grade: FeSi75～B; particle size/mm: natural blocks) in Ningxia was 5,150-5,300 RMB/ton, with an average market price of 5,191 RMB/ton, up 0.25% from Monday.

Influencing factors

Raw Material Semi-coke Market:

Last week, the national semi-coke market was stronger. Downstream major calcium carbide enterprises raised their semi-coke purchase prices by 60 RMB/ton, and semi-coke enterprises successively increased their prices. The recent trend of lump coal prices remained a key factor influencing semi-coke prices. Next week, semi-coke prices are expected to remain stable, with a strong wait-and-see attitude in the market. Some traders suspend purchases, while semi-coke enterprises are actively shipping their products.

Operating Status

Supply was temporarily stable, maintaining the previous status. As of November 6, the national operating rate (capacity utilization rate) was 36.26%, up 0.18% from the previous week; the average daily output was 16,300 tons, up 0.80% from the previous week, an increase of 130 tons.

Downstream Situation

Due to declining profits for various steel products and maintenance shutdowns at some mills, the output of the five major steel products decreased slightly last week. Latest steel bidding information: On November 6th, a steel mill in Jiangxi Province tendered ferrosilicon at 5,770 RMB/ton for 600 tons, with payment upon acceptance and tax included, delivered to the factory. Steel mills were primarily purchasing to meet their immediate needs, and downstream consumption was difficult to realize. Other downstream ferrosilicon companies were experiencing sluggish order intake, with few new orders. Traders were inquiring less, resulting in weak transactions, and overall demand had not shown significant improvement. In general, finished steel demand had entered the off-season, increasing pressure for a subsequent recovery, resulting in a weak supply and demand situation overall.

Market outlook

Based on a comprehensive analysis of various factors, and with the new round of ferrosilicon tenders from major steel mills yet to commence and market sentiment mixed, the spot price of ferrosilicon is expected to remain stable in the short term. Furthermore, due to cost constraints, the downside potential is expected to be relatively limited.

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