SunSirs: Major Steel Mills Were Proceeding Slowly with Their Bidding Processes, and the Ferrosilicon Market Was Experiencing a Slight Price Increase

Price trend:

With the overall market performance being generally weak, companies were operating under pressure, and some had already entered a loss-making state with significantly increasing losses. Against this backdrop, some factories in certain regions had reported furnace shutdowns, while futures prices turned positive, providing favorable support. Furthermore, coinciding with the release of steel procurement demand, major steel mills were slowly progressing with their tenders, and cost-side support remained somewhat strong. As of December 15, most industry players were reluctant to sell at lower prices, and their willingness to reduce prices to move inventory was low. However, the market demand was relatively weak, and as the cold winter season deepened, overall demand may face further challenges, so caution is advised. According to the Business Society Commodity Price Analysis System, on December 12th, the market price of ferrosilicon (grade: FeSi75~B; particle size/mm: natural lump) in the Ningxia region was 5,100-5,250 RMB/ton, with an average market price of 5,127 RMB/ton, a 0.20% increase compared to Monday.

Influencing Factors

Raw Material Semi-coke Market:

Last week, the national semi-coke market remained stable, and downstream mainstream calcium carbide enterprises had not yet adjusted their semi-coke procurement prices. As of December 12th, the price of medium-sized semi-coke in the Shenmu market was 850-920 RMB/ton, small-sized semi-coke was 800-850 RMB/ton, and coke fines were 530-620 RMB/ton; in the Fugu market, medium-sized semi-coke was 850-900 RMB/ton, small-sized semi-coke was 800-920 RMB/ton, and coke fines were 540-670 RMB/ton. In the short term, semi-coke prices are expected to remain stable with a slight downward trend. Semi-coke enterprises are actively shipping their products, and the supply of low-priced goods in the market is increasing.

Production Status

A ferrosilicon plant in Zhongwei, Ningxia, shut down its 4*33000 electric arc furnaces on the 12th, and there were also furnace shutdowns in the Inner Mongolia region. Overall supply increases were limited.

Downstream Situation

As the off-season progresses, the demand for rebar and hot-rolled coils is unlikely to improve significantly. With the seasonal weakening of demand, steel inventory pressure may further accumulate. The weak market outlook for ferrosilicon is exacerbating the off-season weakness. Steel mills have low inventory levels, and the latest steel procurement prices had seen a slight decrease.  Hebei Iron & Steel Group's December tender price for 75B ferrosilicon was 5,660 RMB/ton, a decrease of 20 RMB/ton compared to the previous tender price, with an inquiry price of 5,600 RMB/ton. The November price was 5,680 RMB/ton. Southern steel mills are currently trading around 5,700 RMB/ton (including tax and acceptance at the factory).

Market Outlook

Overall, the market was temporaroly consolidating. Electricity costs rose in major production areas, and while the price of semi-coke remained stable, production costs had increased. The production of rebar and wire rod decreased significantly. Steel mills' profit margins suggest that restocking opportunities will be less than in previous years. Furthermore, a key market risk lies in the fact that strong expectations may not be sufficient to support a rise in ferrosilicon prices. The domestic ferrosilicon spot market is expected to remain stable in the short term, but price adjustments are possible if influenced by certain market news.

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