- Rising power costs, weak margins prompt output cuts
- Inventories decline despite weak demand from mills
Mysteel Global: China’s ferro silicon output declined steadily throughout December to reach 454,245 tonnes (t), down for the second month by 16,855 t or 3.6% from November, according to Mysteel’s monthly survey among the 136 Chinese smelters under its regular tracking.
The sampled smelters host 90% of China’s ferro silicon smelting capacity. Last month, daily production among the sampled ferro silicon smelters reached 14,653 t/day on average, falling by 1,050 t/day or 6.7% from that in November, the survey results showed.
During December, ferro silicon output in Northwest China’s Qinghai, Ningxia and Gansu provinces declined by varying degrees, as local smelters slowed production to ease their losses on sales. Although prices of semi-coke decreased in December, the reduction could not offset the rises in electricity costs smelters in these regions faced as electricity providers struggled with reduced power output in winter.
At the end of December, Mysteel assessed the price of small granularity semi-coke in Northwest China’s Shaanxi at RMB 760/tonne ($109/t), including the 13% VAT, sliding by RMB 60/t ($9/t) from one month earlier.
Ferro silicon inventories held by Chinese smelters continued to thin during December due to their lower output, though demand from end-users, including steelmakers, remained lacklustre, Mysteel Global noted.
Mysteel’s other survey showed that by the end of December, total ferro silicon stocks among the 60 independent smelters under its tracking registered 63,610 t, lower by 8,220 t or 11.4% from one month earlier. These smelters represent about 80% of China’s total FeSi smelting capacity.
China’s ferro silicon prices recovered in the second half of December, thanks to the better performance of the futures market. As of 31 December, prices of 75% ferro silicon under Mysteel’s assessment came in at RMB 5,322/t ($762/t), including 13% VAT, rising by RMB 97/t ($14/t) from the end of November.
On 31 December, the most-traded ferro silicon contract on the Zhengzhou Commodity Exchange for delivery in March closed the daytime trading session at RMB 5,672/t ($812/t), surging by RMB 288/t ($41/t) from the contract’s settlement price on November 28, according to the exchange’s data.
For this month, domestic ferro silicon prices are likely to remain range-bound, mainly supported by the low inventories held by smelters and market expectations for restocking among steel mills.
However, ferro silicon production is unlikely to see any significant fall this month as large smelters have not scheduled any production cuts, a market watcher in Shanghai said. In parallel, as many small and medium-sized smelters have already reduced their output of this ferro alloy, their potential for additional reductions is minimal, according to Mysteel’s survey.
During all of 2025, the sampled Chinese smelters monitored by Mysteel produced 5.55 million tonnes of ferro silicon, declining by a slight 0.7% from the prior year, the survey results showed.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint
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