Ferro silicon production among the 136 Chinese smelters under Mysteel’s monthly survey ended two straight months of declines and stayed largely stable in March, with the tonnage picking up marginally by 1,471 tonnes or 0.3% on month to land at 425,965 tonnes. The surveyed smelters’ output accounts for 95% of the country’s total.
The small pickup in ferro silicon production last month was mainly driven by increased downstream demand from both steelmakers and magnesium (Mg) manufacturers, Mysteel Global observed.
Crude steel output among the member mills of the China Iron and Steel Association (CISA) totaled 64.4 million tonnes in March, up 5.8% from February, Mysteel Global calculated based on the association’s latest data released on Wednesday.
Similarly, Mysteel’s monthly survey showed that Mg ingot production among the 53 Chinese independent manufacturers also rallied by 5.8% on month to reach 77,299 tonnes as of March 31.
Thanks to warmer downstream demand, ferro silicon stocks at smelters stopped mounting as well in March. Mysteel’s weekly survey among the 60 Chinese independent ferro silicon smelters – which host about 79.8% of the country’s total ferro silicon smelting capacity – showed that their total stocks of the ferroalloy thinned by 10,030 tonnes from March 1 to sit at 71,180 tonnes as of March 29.
On the other hand, the softening of raw material prices that led to a reduction in production costs of the ferroalloy in certain regions of the country too prompted some ferro silicon smelters to ramp up their production, Mysteel Global noted.
For example, the production costs for ferro silicon smelters in Northwest China’s Ningxia Hui autonomous region reported lower by 5.1% on month to average Yuan 6,190/tonne ($855.2/t) as of the end of March, a Tangshan-based analyst said. Though some local smelters were still suffering from losses around Yuan 40/t, she added.
Behind the declining ferro silicon production costs was the plunge in domestic prices of semi-coke -a substitute for metallurgical coke used in ferro silicon production. Mysteel’s assessment of the price of semi-coke of small granularity in Shenmu in Northwest China’s Shaanxi was lower by a substantial Yuan 170/t on month at Yuan 730/t as of April 7.
However, it’s worth noting that the weakening prices of raw materials for ferro silicon production have undermined the ferroalloy’s prices somewhat. The price of 75% grade ferro silicon under Mysteel’s assessment for example had declined by Yuan 176.4/t from February 29 to Yuan 6,171.3/t including the 13% VAT as of March 29.
Note: This article has been written in accordance with an agreement between Mysteel Global and BigMint.