The ferro silicon market in China continued to fall w-o-w amid declining spot and future prices. The notable factors that drove the market to head south were:
Lowered offers:
- 75% silicon content: Prices declined by RMB 50/t ($7/t) this week reaching RMB 6,660-6,840/t ($921-$946/t) ex-works, including tax.
- 72% silicon content: Prices decreased by RMB 50/t ($7/t), settling in the range of RMB 6,330-6,520/t ($876-$902/t) ex-works, including tax.
Decline in buyers’ bids: Traders experienced challenges with lower purchase prices, slower inventory turnover, and reduced cost support. Actual transaction prices have shown some loosening, and steel procurement progress towards the end of the month stayed sluggish.
Loss making new capacities: The new production capacity in the northern region failed to meet expectations, and Ningxia stands out with the longest period of loss and the most significant decline in production.
Average downstream demand: Despite, the reduction in production by ferro silicon manufacturers, there has been no significant impact on driving transactions, and the demand for downstream magnesium ingots remained uninterrupted.
Outlook
Ferro silicon production faces near-term pressure as several key regions report losses. Expect a continuation of the weak market trend with potential price volatility due to production adjustments. Producers will likely focus on cost reductions for profitability, with a potential mid-to-long term recovery contingent on market demand or cost adjustments.