- Steel sector slump dampens ferro silicon demand
- Ningxia’s power pricing changes pressure producers
CBC: Chinese ferro silicon prices continued their downtrend amid weak demand, rising power costs, and seasonal pressures. Market volatility, policy uncertainty, and production challenges weighed on sentiment across the ferrous and alloy sectors.
Grade 72% silicon: Prices inched down by RMB 30/t ($4/t) w-o-w to RMB 5,230-5,390/t ($727-750/t) ex-factory, inclusive of taxes.
Grade 75% silicon: Prices fell slightly by RMB 20/t ($3/t) w-o-w to RMB 5,570-5,710/t ($774-794/t).
Market recap
Ferro silicon prices slip amid persistent demand weakness: Ferro silicon price tags edged down slightly, reflecting continued weakness in downstream demand. Although futures prices showed some intraday fluctuation, they lacked solid fundamental support.
Steel mills, grappling with compressed profits, cut back on alloy purchases, further dampening demand. Although there were small gains in stainless steel and magnesium tags, these were not enough to reverse the overall sluggish market sentiment or halt the gradual price slide.
Power cost uncertainty adds pressure on producers: Adjustments to electricity pricing policies in Ningxia, paired with the upcoming summer consumption peak, led to uncertainty around production costs for ferro silicon. Many producers faced reduced flexibility, as power rates rose and margins tightened. While semi-coke prices remained stable, they offered little buffer against growing energy expenses, leaving smelters cautious about increasing output in such a volatile cost environment.
Steel industry slowdown weighs heavily on demand: The broader ferrous market showed clear signs of divergence, with steel demand entering a seasonal lull. This indirectly weakened ferro silicon consumption as steelmakers reduced orders to manage cost and inventory pressure.
The traditional off-season is proving more severe this year due to ongoing macroeconomic uncertainty, compounding challenges for ferro silicon producers, who are already dealing with low margins and tightening supply-side constraints.
ZCE futures inch up w-o-w: On 17 June, ferro silicon prices on the Zhengzhou Commodity Exchange (ZCE) for September 2025 delivery edged up by RMB 90/t ($13/t) w-o-w to RMB 5,264/t ($732/t) from RMB 5,174/t ($720/t).
Outlook
In the short term, ferro silicon prices are likely to remain volatile. Weak demand and high inventories will limit any upside, though rising costs may slow further declines. Rebound chances depend on steel market recovery.
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